An energy bill recently approved by the Senate could result in higher soybean prices for growers, the American Soybean Association says.
“Securing passage of the biodiesel tax incentive and other measures designed to encourage the use of the fuel is our top legislative priority for the year,” says American Soybean Association President Ron Heck of Perry, Iowa.
Now the group says it's one step closer to that goal thanks to the Senate legislation, which includes the ASA-backed biodiesel tax incentive. The bill also includes a one-cent reduction of the diesel excise tax per percentage of biodiesel blended with diesel, up to 20 percent, and a Renewable Fuels Standard that calls for the nation's fuel supply to increase its use of renewable domestic fuels, like ethanol and biodiesel, to 5 billion gallons in 2012.
Heck says, “Incentives increasing biodiesel demand will boost the need for soybean oil, its primary feedstock, which in turn will raise the price of soybeans. There are other reasons why biodiesel is so important to our country, in addition to these economic benefits. Biodiesel is made primarily from soybean oil grown here in the United States, so it lessens our country's dependence on foreign oil. With over 55 percent of the oil we consume coming from the highly unstable Middle East, renewables like biodiesel should become a larger portion of our nation's fuel supply.”
Biodiesel, which is a clean-burning alternative to petroleum-based diesel fuel that is produced primarily from soybean oil, offers benefits as well, he says. “An increased demand for biodiesel could also create thousands of jobs across the U.S. economy, and emissions of greenhouse gases and particulate matter would be significantly reduced by increased biodiesel use.
“Soybean-based biodiesel is good for farmers, good for the environment, and good for our country,” says Heck. “Incentives designed to encourage people to use biodiesel is the right policy for our country, and, on behalf of the ASA, I applaud the Senate for taking a big step in this direction.”
The U.S. House of Representatives approved its energy bill earlier this year. The difference between the House and Senate bills will be reconciled in a joint House/Senate conference committee. Conference is where the refinements made by the Senate Finance Committee to the biodiesel tax incentive contained in the 2002 energy bill are expected to be included. The refinements were made through the amendment offered by U.S. Sens. Chuck Grassley, R-Iowa, and Blanche Lambert Lincoln, D-Ark., during Finance Committee consideration of the energy tax package last April.
In addition to this change, the ASA will be seeking to include in the final energy bill other key biodiesel measures, such as those supported by Sens. Kit Bond, R-Mo., Jim Talent, R-Mo., and Tim Johnson, D-S.D., that would encourage the use of biodiesel in meeting federal requirements for government alternative fuel use.
“While the Senate vote was a huge victory for biodiesel, supporters of the ASA Biodiesel Campaign should know that anything could change once the bill goes to conference. All soybean farmers should thank their senators who supported the bill and encourage them, as well as their representatives in the House, to express their support for the inclusion of strong biodiesel provisions in the final energy bill,” urges Heck.