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Farmers, biodiesel producers need an economic lifesaver

terça-feira, abril 16, 2019

Biochemical engineer Shannon Sanford shows off bottles

Congress must renew biodiesel tax incentive.

The biodiesel industry got its start in the 1990s as farmers searched for new uses for excess soy oil. Over the decades, farmers had become very productive at meeting the growing demand for soymeal protein. But we were producing more oil than anyone could eat. Biodiesel production has since provided farmers a new market for their oil, and consumers a lower-cost, cleaner source of domestic energy.

Perhaps more than ever, biodiesel production is a crucial economic lifeline for Iowa’s farmers. This past growing season as we planted a record soy crop, trade disputes shut down markets and undercut prices. On top of that, the weather dealt us several setbacks. Because of those challenges, U.S. stored supplies of soybean oil are approaching levels similar to those that existed before the biodiesel industry took off.

A loss of biodiesel production would deliver another painful economic blow – not just to farmers, but also to consumers. Biodiesel production adds around 60 cents in value to every bushel of soybeans. That lowers the cost of food by reducing the price that soybean crushing plants charge for meal, which has the effect of lowering the cost of livestock production. Back before the biodiesel industry took off, soybean crushers had to charge higher prices for the meal and take losses on the oil. Biodiesel and renewable diesel production also adds value to used cooking oil and recycled animal fats, which cuts the overall costs of food production.

A loss of biofuel production would hit consumers’ wallets in other ways. Domestic biofuels lower demand for foreign oil, which eases pressure on fuel prices. Overall, the price U.S. truckers and drivers pay for every gallon of diesel would be at least 17 cents higher without homegrown biofuels, according to the National Biodiesel Board. The United States has invested a great deal of effort to build a domestic biofuel industry to defend against the nation’s reliance on imported oil. We shouldn’t turn back on that now.

It’s important to understand that without biodiesel, everyone would end up worse off from a loss of cleaner. Biodiesel is the nation’s most widely used advanced biofuel because of its lower carbon emissions. It also reduces air pollution, with fewer airborne particulates and hydrocarbons that are tied to serious human health problems.

Here in Iowa and throughout the U.S., the biodiesel industry is satisfying the demand for cleaner fuels. But at the same time, there are growing threats. Biodiesel producers have operated for the past 15 months with overwhelming uncertainty about the future of a vital tax incentive. That tax credit helped the U.S. biodiesel industry grow to more than 2.6 billion gallons last year, and we still need it to maintain the industry’s momentum.

Rep. Abby Finkenauer and Sen. Chuck Grassley deserve thanks for proposing a lifesaver for biodiesel producers and farmers. Each has introduced bipartisan legislation to renew the biodiesel tax incentive through the end of this year. And they’ve organized bipartisan support for their legislation that should make it very easy for Congress to act as soon as possible to pass it.

Farmers need some good news right now, and our Iowa leaders are working hard to deliver it.

Ron Heck farms in Perry. He serves as secretary for the National Biodiesel Board and is a former director of the Iowa Soybean Association and past officer of the Iowa Biodiesel Board.

To watch the video of the article, click here.

Page: Des Moines Register

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