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Do you agree with new policy that reduces taxes for US producers of renewable chemicals?
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Biofuels International Conference 2013
11 September 2013 - 12 September 2013
Ramada Plaza, Antwerp, Belgium
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ILTA
3 June 2013 - 3 June 2013
Houston, Texas |
21st European Biomass Conference and Exhibition
3 June 2013 - 7 June 2013
Copenhagen, Denmark |
Renewable Energy World Europe
4 June 2013 - 6 June 2013
Messe Wien, Vienna, Austria |
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Volume 5, Issue 1
Feature: A critical moment |
With the reinstatement of the tax credit and the RFS2 gaining traction it could be a great year for biodiesel in the US, but what happens next is far from certain GreenHunter Biofuels in Grapevine, Texas – one of the US’ largest biodiesel plants – is idle and still recovering from damages sustained during Hurricane Ike in 2008. For the time being it is being used as a bulk liquid storage and distribution terminal. Just before the reinstatement of the biodiesel tax credit the plant’s original parent company divested its interest in the facility: a 105 million gallon-a-year biodiesel plant, a methanol distillation centre and glycerin refinery. When asked if the company should have been a little more patient, Jonathan Hoopes, CEO of GreenHunter Energy, replies: ‘Congress waited a whole year to reinstate the tax credit after it expired, and then only extended it for a year. We cannot make long term capital decisions based on one year’s worth of reassurance. It’s very difficult to have faith in Congress, so we’re focusing on businesses that don’t need subsidies to survive.’ To amplify this sentiment, Ultra Green Energy Services, a leading US biodiesel marketer based in Chicago, says that in 2012 the US biodiesel industry will come to a standstill. ‘What does a one year blender’s tax extension really do?’ Danny Falcone, northeast wholesale manager for Ultra Green Energy Services, asks. ‘It creates the impossibility of negotiating long term contracts, invites more competition from international producers, pushes down the value of renewable identification numbers (RINS) and tightens credit strings. ‘Call me crazy, but I wish the tax credit hadn’t come back. November was our best month of trading in three years. The price of RINS was near $1 (€0.7) – I wish it would come back on a long-term basis or not at all, we need to develop this market without the tax credit.’ Falcone’s argument is that what Congress ultimately has done is create uncertainty.
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