The American JOBS Creation Act of 2004, which passed the House and Senate earlier this week provides biodiesel producers a tax credit of 1 cent for every percent of biodiesel in a fuel. For example, a blended diesel with 20% biodiesel (B20) will receive a 20-cent credit on the national fuel excise tax. Biodiesel advocates are hailing the credit as the "defining moment" for the fuel. Bob Metz, chairman of the National Soybean Board, says that the credit is expected to dramatically increase demand for the fuel over the next few years. He expects the incentive to boost production levels to over 150 million gallons, up from the current level of 30 million gallons.
One correction: we noted on Tuesday that the JOBS Act also extended the PTC for wind power until Dec. 31, 2006. While the original Senate version of the bill did contain such an extension, the compromise bill finally approved by the House and Senate scaled the extension back to Dec. 31, 2005 to match the language in the Family Tax Bill (H.R. 1308) passed earlier this month.
