http://www.hydrogenfuelnews.com/biodiesel-has-become-so-inexpensive-in-the-u-s-that-its-free/8527297/
[links in on-line article]
Biodiesel has become so inexpensive in the U.S. that it’s free
Posted on 09 February 2016.
Some refiners are being paid to use biofuel.
Tax credits in the U.S. have made biodiesel so cheap in some parts of
the country that some refiners are being paid to use this clean
substitute to diesel. More specifically, one-dollar-a-gallon tax subsidy
and other credits, has resulted in Midwest refiners paying as little as
64.5 cents a gallon for the alternative fuel. This, plus additional
clean energy incentives offered by California, has lead to some
customers in the Golden State obtaining the fuel for free, reported
Bloomberg.
The commitment to renewable fuel has benefited some refiners.
Biodiesel’s dramatic reduction in cost appears to be the result of two
factors. The first is that crude oil’s 71% drop since 2014 has decreased
the price of all fuel from gasoline to diesel. The second is that due to
the Obama administration mandating the use of renewable fuels, to help
combat climate change, America has shown an improved commitment to clean
fuel.
Back in November, the American government increased the amount of
biodiesel refiners were required to use and congress reinstated a
one-dollar-a-gallon tax credit for the use of this fuel in December.
The EPA (Environmental Protection Agency) tracks compliance in relation
to the consumption mandate by way of certificates, which are attached to
every gallon of biofuel. The value of the certificates and the tax
credit reduces the final costs of the alternative fuel similar to a rebate.
Refiners may actually be getting money back on every gallon of biodiesel
they buy.
According to the CEO of San Diego-based New Leaf Biofuel, Jennifer Case,
when refiners purchase a gallon of biodiesel, in essence, what they
receive is the fuel along with all the credits and subsidies. In certain
situations, biodiesel producers and blenders will share the value of tax
credits.
This could mean that some contracts are negotiated by taking the
incentives into account, while other contracts won’t factor them in at
all. Case said those contracts are exceptionally odd because “Those are
the ones that actually could result in reversing the invoice. The
customer has to charge me to take the fuel.”
This year, oil companies in America are required to use 1.9 billion
gallons of biodiesel.
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