| Biodiesel production, distribution, and use, | | | | sells the biodiesel retail which is then used |
| as with many emerging alternative energies, | | | | in the fuel tank of the buyer. |
| has been aided in large part by recent | | | | |
| government incentives making biodiesel fuel | | | | The tax credits on Straight Biodiesel are |
| production and distribution more attractive. | | | | equal to $1 per gallon of agri-biodiesel and |
| These tax incentives put money back in the | | | | $0.50 per gallon of waste grease biodiesel. |
| pockets of biodiesel producers who, | | | | The tax credits on Biodiesel Mixtures are |
| presumably, pass the benefits on to you, the | | | | $0.01 (a penny) per percentage point of |
| consumer, with lower biodiesel prices. | | | | agri-biodiesel and $0.005 (half-a-cent) per |
| | | | percentage point of waste grease biodiesel. |
| Not just any biodiesel is eligible for tax | | | | |
| incentives. The definition of biodiesel fuel, | | | | That is, unless the amount of credit approved |
| as it's used for tax purposes, is "monoalkyl | | | | to taxpaying biodiesel companies applying for |
| esters of long chain fatty acids". Biodiesel | | | | the credit in a given year exceeds the annual |
| production companies seeking any of these | | | | cap of $1.5 million, in which case the |
| credits must ensure that they are making | | | | Department of Revenue will prorate credits to |
| biodiesel fuel that meets the Environmental | | | | biodiesel production companies accordingly. |
| Protection Agency (EPA) requirements for | | | | |
| registration of fuels and fuel additives as | | | | These tax credits, however, are currently |
| described in the Clean Air Act, as well as | | | | temporary, and set to expire in 2008 - an |
| requirements put forth by the American | | | | added incentive to get started now on that |
| Society of Testing and Materials. | | | | biodiesel production company of your own that |
| | | | you've been dreaming about. There's literally |
| All companies, whether a biodiesel production | | | | no time to waste. |
| company or not, that are selling or using | | | | |
| biodiesel may qualify for the Biodiesel and | | | | Another Federal Tax Credit, the Small |
| Ethanol (VEETC) Tax Credit, on their income | | | | Agri-Biodiesel Producer Credit (Section 1345: |
| taxes. There are two such types of credit. | | | | Energy Policy Act of 2005), grants $0.10 per |
| | | | gallon on up to 15 million gallons to small |
| - the Straight Biodiesel Credit (considered a | | | | agri-biodiesel production facilities |
| "general business credit" by the IRS) - the | | | | producing less than 60 million gallons per |
| biodiesel in question must not have been | | | | year. |
| mixed with any petroleum-based diesel fuel, | | | | |
| and the company itself must be the biodiesel | | | | Incidentally, there are local and state tax |
| production company making it; | | | | credits all over the country available on |
| | | | biodiesel cost and costs on other alternative |
| - the Biodiesel Mixture Credit - the | | | | fuels. Visit: to find out what your locality |
| biodiesel in question must contain only | | | | offers. |
| biodiesel fuel and petroleum-based diesel, | | | | |
| with absolutely no kerosene added, and the | | | | According to recent U.S. Department of |
| company itself must be the biodiesel | | | | Agriculture (USDA) study, demand for |
| production company making it. | | | | biodiesel production is set to increase by at |
| | | | least 124 million gallons per year, however |
| Additionally, for either tax credit on | | | | fears about the rapidly rising prices of |
| biodiesel cost, one of the following criteria | | | | crude oil suggest that facilities might be |
| must also be met;othe biodiesel production | | | | making biodiesel fuel in even larger amounts |
| company actually uses the biodiesel itself as | | | | and at an even faster rate. |
| a fuel;othe biodiesel production company | | | | |