Lawmakers talk biofuel tax credits

Local News

Midwest lawmakers are joining together to renew a tax credit aimed at helping struggling farmers and AG workers. They’re asking for a two-year extension on the Biofuel Tax Credit that gives producers a $1 per gallon tax credit; it expired more than 15 months ago.

It’s been a rough financial year for US agriculture thanks to a tumultuous trade war with China, falling prices and a series of natural disasters.

Now, farmers and manufacturers say they could face more money trouble if Congress doesn’t renew the credit.

Kurt Kovark of the National Biodiesel Board says, “For 15 months, they’ve been selling at break even or a loss… The longer they have to carry that burden, the longer they don’t get credit when they can’t get credit to continue operations… that follows with layoffs and plant closures.”

Kovark calls the matter urgent for everyone. He says the subsidy keeps fuel prices down for truckers and reduces carbon air pollution on the road.

“From our perspective, there’s no reason the entire country shouldn’t be on board.”

Midwest lawmakers are pushing a plan to extend the credit two more years. Since 2005, the program has passed with bipartisan support. But, this time around, it’s facing push-back from the White House.

Katie Tubb, of the Heritage Foundation, says, “Americans can’t afford policies like this”.

Like the administration, Tubb says all energy subsidies need to go. 

“If we want to get on a sustainable path, we need to take a look at all these tax policies.”

Right now, the plan has support from both parties and was just introduced in the House.

Congressman Mike Kelly was one of four lawmakers who introduced the Biodiesel Tax Credit Extension Act of 2019.

The credit hits close to home, with Hero BX operating a biodiesel facility in Erie. Hero BX operates as one of the largest producers of biodiesel in the Northeast United States.

Company officials say losing the tax credit would be a financial hit, but the not knowing one way or the other is making it difficult to do business.

John Nies, Vice President of Operations for Hero BX, says, “The certainty is the problem; if we know it was cut, you’re able to plan and budget and price things correctly. So, certainty in the industry is very, very important. Obviously, it’s a huge hit if we don’t get it going back 1 1/2 years without it, but so, it’s very important, but not the end of Hero BX if that were to go away.”

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