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Biodiesel tax credit could be saved by border wall deal

 Photo Credit: Shutterstock
Photo Credit: Shutterstock

Lower diesel prices for truck stop owners and their trucking customers could hinge on the ability of Congress and President Donald Trump to hash out a deal by Friday’s deadline on a new spending bill.

Last year Congress came close, but failed, to pass an extension to the U.S. Department of Energy’s $1/gallon biodiesel tax credit for 2018, which incentivizes diesel fuel retailers to blend biodiesel into their fuel supplies. Absent the government incentive, biodiesel fuel becomes more expensive to sell than diesel, forcing retailers to raise the price for truck drivers and fleet operators.

On February 11, a bipartisan group of 44 members of the U.S. House of Representatives sent a letter to House Speaker Nancy Pelosi urging her to help them pass the extension “in the coming weeks.” But in the Senate, Chuck Grassley (R-Iowa), is receiving pressure from trucking and fuel interests to take more immediate action – by including the extension as part of the hot-button legislation that will decide funding for the southern border wall.

“Unfortunately at this point, in order for the tax credit to come through, it has to hitch a ride on a large legislative vehicle, and unfortunately for us, [the border wall funding] is probably the most controversial legislation in Congress in years,” said David Fialkov Vice President of Government Relations for NATSO, which represents truck stop operators, speaking at the group’s annual conference in Orlando on February 12.

Voting on border wall funding, part of the larger spending package, has to take place by this Friday (February 15th) to avoid yet another government shutdown.

“It’s unclear whether attaching it to that bill will disrupt the delicate legislative balance they’ve achieved on this issue thus far,” Fialkov said. “If Nancy Pelosi and [Senate Majority Leader Mitch] McConnell thought attaching it will make the bill less likely to go through, they won’t do it. At that point looking down the road, however, we don’t have another must-have [piece of] legislation” on which to attach it the tax credit, he said.

Grassley, who took over as Chairman of the Senate Finance Committee in the new Congress, has championed both the biodiesel tax credit and the Renewable Fuels Standard (RFS), a U.S. Environmental Protection Agency program that also serves to lower biodiesel costs for truck stop owners and their customers. NATSO testified before Congress in support of the program last year.

Fialkov said he was hopeful the 2018 biodiesel tax credit will get renewed this year even if it doesn’t get attached to border wall funding. “The idea of [Grassley’s] pet policy dying the moment he becomes chairman is not something I imagine happening,” he said.

However, he added, the longer it takes to install policy in 2019 retroactive from 2018, the more difficult it will get for Congress to act on it.

“If it gets past tax filing day, when companies would have to amend their tax filings in order to get the credit, then I’ll probably begin to get a more worried. A lot of producers are months away from going under if they don’t get this credit, and Grassley knows that, so I think he’s going to have a sense of urgency.”

John Gallagher

Based in Washington, D.C., John specializes in regulation and legislation affecting all sectors of freight transportation. He has covered rail, trucking and maritime issues since 1993 for a variety of publications based in the U.S. and the U.K. John began business reporting in 1993 at Broadcasting & Cable Magazine. He graduated from Florida State University majoring in English and business.