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