ALTOONA, Iowa — For the first time in a while, there is some excitement in the biodiesel market.
“The outlook is very, very exciting,” said Cynthia “C.J.” Warner, CEO of Renewable Energy Group. “I believe we’re at a pivot point.”
The primary reason for that optimism is the surprise move by Congress last month to reinstate the federal biodiesel tax credit. That credit had expired at the end of 2017 after years of annual renewals, sometimes enacted retroactively. It was not renewed the past two years despite strong support from farm-state legislators.
But last month Congress, as part of a year-end spending package, surprised many industry observers by not only passing a renewal, but extending it out for three years.
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“We really didn’t think we could hope for that,” Warner said.
She said the biodiesel industry had largely been operating under the assumption and hope that Congress would eventually pass a retroactive renewal of the credit. If that had not been done many biodiesel makers would have been in trouble.
“They were digging themselves a hole,” she said.
But few expected Congress to actually do what the industry had pushed for — an extension that would give producers more certainty. That part of the extension will allow industry leaders to plan ahead and to grow. The next step, she said, is for the industry to take advantage of that certainty to grow and to plan for an eventual phase-down of the credit.