08/15/07 Biodiesel Credit Problems

Biodiesel Credit Problems. I'm Greg Martin with today's Line On Agriculture. The National Biodiesel Board is questioning why ConocoPhillips is being allowed to claim a tax credit that was designed as an incentive to encourage the development of renewable fuels. NBB's Chairman, Darryl Brinkmann says that ConocoPhillips is taking advantage of the credit. BRINKMANN: Here a couple of years ago when the energy bill was signed there was a provision that was put in there that would allow for a process called thermal depolymerization to be used in making biomass and it was intended for a Tyson food plant in Missouri to be made into something called renewable diesel. About a year ago or so ConocoPhillips began asking the Treasury Department, the Internal Revenue Service to take a liberal interpretation of that process and allow them to take animal fats and vegetable oils and run that through their refineries and claim the dollar a gallon tax credit. Brinkmann says that is not what was intended for the credit. BRINKMANN: And my organization the National Biodiesel Board worked very hard to get the biodiesel tax credit enacted to that we could jumpstart the biodiesel industry; give people confidence enough to build biodiesel plants and to invest in infrastructure and distribution systems and things for biodiesel. And we feel this isn't the original intention of the maker of this amendment and he agrees with us. The Treasury ruled that it was. The product that ConocoPhillips is making is not a true biodiesel according to Brinkmann. BRINKMANN: No, it's really not. It comes out and they call it renewable diesel and they run it in their plants along with their oil and whatever else they used to make diesel fuel. The NBB has been holding a series of town hall meetings across the country to get the word out that ConocoPhillips is taking advantage of the tax credit for something it wasn't designed for. BRINKMANN: We have some supporters in Congress that have introduced legislation that would strike the requirement that the thermal depolymerization be used and also deny the dollar a gallon renewable diesel credit to fuel derived from co-processing. In other words if a petroleum plant would build new capacity and just process vegetable oil or fats or any kind of animal parts or something in that capacity then they'd be eligible for it but if they co-process it with petroleum oil they would not be eligible. That's today's Line On Agriculture. I'm Greg Martin on the Northwest Ag Information Network.