WASHINGTON, D.C. – Producers of biodiesel could continue to get tax breaks until 2017, and federal officials said that will help ensure a competitive price at the pump for renewable fuels, according to Land Line magazine. A bill introduced Mar. 14, in the U.S. Senate would extend the existing $1-per-gallon federal excise tax credit and income tax credit on pure biodiesel by 10 years. The intent of the law, which dates back to 2004, has been to entice producers to build more plants and add capacity.

Sen. Blanche Lincoln, D–AR, and Sen. Norm Coleman, R–MN, filed the bill to extend the program, hoping the tax credit will not end. If it were to end, it would leave biodiesel producers struggling to compete in a market dominated by petroleum diesel.

The tax incentive leads to a credit of up to $1 per gallon of pure biodiesel above the rack. For bio and petroleum blends, it translates to a penny per percentage point of biodiesel in a gallon.