As a result of the expiration of a biodiesel tax credit on Dec. 31, the National Biodiesel Board said the biodiesel industry is on the verge of collapse, according to the San Jose Mercury News.

Much of the industry has simply shut down. Almost half of its employees have been laid off, the board said.

A retroactive reinstatement of the biodiesel tax incentive was incorporated into H.R. 4213, the American Jobs and Closing Tax Loopholes Act of 2010. It passed the House in May and is now under consideration in the Senate. The bill, however, failed to clear a key procedural vote in the Senate on June 24, leaving the industry in continued limbo. The vote sends the bill back for reworking.

Joe Jobe, chief executive officer of the National Biodiesel Board, said more than 150 manufacturing plants have been constructed in the last five years since the tax credit was enacted, helping make the tax credit one of the most effective energy policy initiatives ever enacted by the U.S. government.

The expiration of the tax credit has been tough on businesses such as The Green Station, the only biodiesel station in California's Santa Cruz, Monterey, and San Benito counties.

Green Station customers were briefly promised conditional rebates based on whether Congress renewed the 5-year-old tax incentive program, but record keeping was too cumbersome. The company still partially dropped prices, hoping to eventually recoup its losses if the tax credit is extended.