U.S. Agriculture Secretary Tom Vilsack is among those urging members of Congress to vote yet this year to extend tax breaks for soybean-based biodiesel and corn-based ethanol. Vilsack notes, the tax break for biodiesel expired at the end of 2009 and resulted in the closure of biofuels plants across the U-S, including two in Nebraska.
“It is important for us to renew the biodiesel tax credit because when it was allowed to elapse we lost 50 percent of our biodiesel production and 12,000 jobs,” Vilsack says. The tax advantage for ethanol is set to expire December 31st.
Vilsack says rural America benefits from the biofuels industry, as not only farmers reap financial benefits from higher-priced commodities, but the plants that produce the biofuels employ thousands. Two key senators — one from Oklahoma, the other from South Carolina — are pushing fellow Republicans to allow the ethanol tax break to expire, arguing the government subsidies for ethanol have increased food prices and have been bad for the environment because of decreased efficiency in vehicles which run on ethanol-blended fuels.
Vilsack, a former two-term governor from Iowa, supports giving ethanol producers a tax break.
“It’s important for us to continue to renew the ethanol credits — in one form or another — so that we recognize this is a maturing industry, not a mature industry,” Vilsack says. “It needs a little bit more additional help for it to expand nationwide which is what we’re hopeful to be able to do.”
Vilsack expects a debate about the tax breaks for ethanol and biodiesel to be part of the discussion in congress over extending the Bush-era tax cuts. Nebraska had two commercial biodiesel plants, Horizon Biofuels in Fremont and Northeast Nebraska Biofuel in Scribner. Both have shut down, but could be reopened if market conditions improve. Nebraska is the nation’s number-two ethanol producer, behind only Iowa.