http://www.grandforksherald.com/news/business/3740187-biodiesel-tax-credit-expiration-puts-brakes-industry
Biodiesel tax credit expiration puts brakes on industry
By Jessica Holdman, Bismarck Tribune on May 7, 2015 at 9:45 p.m.
VELVA, N.D. -- In February, Archer Daniels Midland's Velva plant shifted
away from producing the biodiesel it was designed to make.
The industry and lawmakers say biodiesel investments are going to waste
because of unreleased volume obligations for the Renewable Fuel Standard
have been delayed.
“With favorable economics and reliable RFS, 2014 was poised to be a
breakout year for biodiesel, until the 2014 Renewable Volume Obligations
proposal intervened,” Kent Engelbrecht, biodiesel trade manager at ADM,
said during a press conference hosted by U.S. Sen. Heidi Heitkamp,
D-N.D., Thursday. “With the subsequent expiration of the biodiesel tax
credit, we were forced to cease or slow production at all of our
facilities, including Velva.”
The U.S. Environmental Protection Agency was supposed to release RVOs
for a year in advance but failed to do so. Earlier this month, the
agency announced it would finalize the delayed RVOs by Nov. 30.
Engelbrecht said the RVO offered incentive to operate at capacity and
invest in the Velva facility, which employs 80 people as well as buying
canola from area farmers. He said delays have dissuaded investment. He,
Heitkamp and five other Democratic senators called for a "reliable and
growing" RFS.
Engelbrecht said margins for the industry are at an all-time low.
Tom Lilja of the North Dakota Corn Growers Association said the corn and
ethanol industries have also been disappointed by RFS delays, however
production of ethanol has not been curtailed by the rule delay.
"It's a function of economics," he said.
Lilja said high corn prices in 2012 caused a drop in ethanol production
but lower prices have brought it back to normal levels.
"They're very different markets," said Ben Evans, director of federal
communications for the National Biodiesel Board.
Evans said biodiesel is a younger industry that still needs the support
of policy. European Union tariffs have also eliminated an export market
for the product, he said.
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