Mr. McCONNELL. Mr. President, on December 31, 2009, the current biodiesel tax credit will expire. This tax credit increases domestic demand and provides an incentive for U.S. producers to increase investment and output. It is essential in producing biodiesel and allowing it to compete with petroleum diesel. Without the tax credit, petroleum marketers will be unwilling to purchase the more expensive biodiesel, and demand will be heavily reduced.
As all of my colleagues know, the biodiesel tax credit provides a $1-per-gallon credit for biodiesel made from soybean oil or yellow grease and animal fats. The original version of this tax credit was passed in 2004 and has been extended twice, most recently in October 2008.
As a result, the U.S. biodiesel industry has grown significantly over the past several years, providing not just jobs but also the green jobs this administration and many of my friends on the other side of the aisle have so adamantly supported. However, the combination of volatile commodity prices and weak motor fuel demand caused by the current recession has severely affected the biodiesel industry for the worse and therefore increases our urgency to extend the credit today.
In Kentucky, public school districts, universities, National and State parks, local governments, and the Transportation Cabinet are using biodiesel blends. These institutions and many Kentucky employers, including manufacturers in Kentucky, will be hurt beginning on January 1 if we allow this tax credit to expire. One executive of a biofuel manufacturing facility wrote to me to say:
The $1-per-gallon tax incentive is truly the difference between the survival and collapse of this important industry. Without this tax incentive, thousands of jobs will be lost with plants closing down almost immediately after January 1. And the nation will lose a vital link in its effort to reduce our dependence on foreign oil.
As we continue our important business, I implore my colleagues on the other side of the aisle to work to get the extenders finished this year and to include the renewal of the biodiesel tax credit.