Statements on Introduced Bills and Joint Resolutions

Floor Speech

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Mr. GRASSLEY. Mr. President, I have long been a champion of domestic biofuel production, including ethanol, biodiesel and cellulosic fuels. Domestic biodiesel production supports tens of thousands of jobs. Replacing traditional diesel with biodiesel reduces emissions and creates cleaner air. Homegrown biodiesel improves our energy security by diversifying our transportation fuels and reducing our dependence on foreign oil. Biodiesel itself is a very diverse fuel. It can be produced from a wide array of resources such as recycled cooking oil, soybean and other plant oils, and animal fats.

I am proud of the success of the American biodiesel industry, and I am glad to be introducing today the Biodiesel Tax Incentive Reform and Extension Act of 2016, which will ensure the continued success. I appreciate Senator Cantwell's leadership in joining this effort. I also appreciate the support of Senators Roberts, Heitkamp, Thune, Whitehouse, Kirk, Heinrich, Ernst, Donnelly, Blunt, Hirono, Franken and Murray. This bill will modify the biodiesel fuel blenders credit to a domestic production credit, and extend the credit through 2019.

Congress created the biodiesel tax incentive in 2005 when I was Chairman of the Senate Finance Committee. As a result of this incentive, and the Renewable Fuel Standard, biodiesel is providing significant benefits to the nation.

Senator Cantwell and I have been advocating since 2009 to modify the current incentive. We have proposed making the credit available for the domestic production of biodiesel, rather than a mixture credit available to the blender of the fuel.

The bill we are introducing today is similar to an amendment that I offered with Senator Cantwell during consideration of the tax extenders package in the Senate Finance Committee in July of last year. Our biodiesel reform amendment passed unanimously by voice vote.

Converting to a producer credit improves the incentive in many ways. The blenders credit can be difficult to administer, because the blending of the fuel can occur at many different stages of the fuel distribution. This can make it difficult to ensure that only fuel that qualifies for the credit claims the incentive. It has been susceptible to abuse because of this.

A credit for domestic production will also ensure that we are incentivizing the domestic industry, rather than subsidizing imported biofuels. It is projected that imports from Argentina, Indonesia, Singapore, the European Union, South Korea and others could exceed 1.8 billion gallons over 2016 and 2017.

We should not provide a U.S. taxpayer benefit to imported biofuels. By restricting the credit to domestic production, we'll also save taxpayer money. The amendment adopted in the Finance Committee was estimated by the Joint Committee on Taxation to reduce the cost of the extension by $90 million.

Importantly, modifying the credit will have little to no impact on the consumer. Much of the credit will continue to be passed on to the blender and ultimately, the consumer. Additionally, the U.S. biodiesel industry is currently operating at approximately 55 percent of capacity. The domestic biodiesel industry has the capacity and access to affordable feedstocks to meet the demand of U.S. consumers.

The current biodiesel credit expires at the end of this year. It is my hope that when the Senate considers legislation to extend expiring tax provisions, that the Biodiesel Tax Incentive Reform and Extension Act of 2016, will be included. I strongly encourage the leadership of the House and Senate to include these biodiesel reform policies that were adopted in the Senate Finance Committee unanimously last year.

This modification will ensure that the credit is doing what Congress intended--incentivizing investment in domestic biodiesel production. Surely we can agree that we should not be providing a U.S. taxpayer subsidy to already heavily subsidized foreign biodiesel imports.

I therefore urge my colleagues to support the production of American biodiesel and this common-sense, cost reduction reform. ______

By Mr. DAINES (for himself and Mr. Tester):

S. 3192. A bill to designate a mountain peak in the State of Montana as ``Alex Diekmann Peak''; to the Committee on Energy and Natural Resources.

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