The American Soybean Association (ASA) has called for the Senate to reinsert a retroactive extension of the biodiesel tax incentive in the first jobs bill it passes to save the jobs of 23,000 people working in the biodiesel industry.

The biodiesel tax incentive had been included in a version of the Senate Jobs Bill unveiled last week by Senators Max Baucus (D-MT) and Chuck Grassley (R-IA), but Senate Majority Leader Harry Reid (D-NV) later stripped the biodiesel and other tax provisions out of the bill.

For more, see Biodiesel fuels debate in Senate and Ag-disaster package in limbo.

Production of biodiesel, a homegrown renewable fuel, also supports higher prices paid to farmers for their soybeans, which contributes additional employment opportunities in both urban and rural communities.

“There is a direct correlation between the biodiesel tax incentive and creating jobs,” said Alan Kemper, ASA First Vice President, a soybean producer from Lafayette, Ind. “If senators really want a bill to save jobs for American workers, they need to put a retroactive extension of the Biodiesel Tax Incentive back in the first jobs bill they consider. Put simply, we don’t understand the logic used to strip the biodiesel provisions out of the bill. The biodiesel tax incentive provisions would save and create thousands of green jobs and help all Americans move away from their dependence on imported petroleum.”

Expiration of the biodiesel tax incentive on December 31, 2009, has essentially caused the production and use of biodiesel in the U.S. to cease and has placed the 23,000 jobs that are currently supported by the domestic biodiesel industry in immediate jeopardy. Companies have already started laying-off employees, and this situation is certain to worsen the longer the tax incentive is allowed to lapse.

The one dollar per gallon biodiesel tax incentive is structured in a manner that makes biodiesel price competitive with petroleum diesel fuel in the marketplace. Absent the tax incentive, biodiesel is more expensive than conventional diesel fuel.

“Biodiesel has the best energy balance and the best greenhouse gas reduction of any fuel that is currently in the commercial marketplace, and biodiesel is the only advanced biofuel that has reached commercialization in the United States,” Kemper said. “Biodiesel is an excellent way for America’s soybean growers to boost U.S. energy security, promote economic development and improve the environment.”