Biodiesel Companies Folding Left and Right, After Gov't Cuts Tax Credit
January 4, 2010 10:30 AM
comment(s) - last by
The rollback of a $1/gallon federal tax credit on biofuels threatens to sink many small biodiesel producers across the country.
Without the $1/gallon federal tax credit, the biodiesel industry no longer appears commercially viable
While most are hoping that the U.S. can transition to electric vehicles and vehicles running on sustainable biofuels, this last year has made it clear that the process will be no walk in the park. Recent studies showed that, in their current form, hydrogen cars
emit more carbon over their lifecycle
than gas cars. And early consumer electric vehicles, like the
BMW Mini E
, while low emissions, have suffered from a variety of
temperature related woes
Now the biofuels sector has become the latest green transportation field to suffer disappointment in 2009. The year started off rocky with the European Union in March unveiling import-killing tariffs on biodiesel and other biofuel. Then, as the U.S. recovered from the recession, diesel prices dropped 18 percent off their highs, making it harder to justify the high costs of biodiesel.
Now another nail has been placed in the commercial biofuel industry' coffin -- the government
$1/gallon federal tax credit
this Friday. And for many businesses in the industry, it may be the last; amid a frustrating market, many biodiesel makers across the U.S. say they will likely call it quits and cease production when the credit ends.
The largest biodiesel refinery, located in Houston, Tex. has already shut down. Another large refinery, located in Hoquiam, Wash. has been shut down as well, following a December explosion.
However, it's not just big businesses that are cutting biofuel production and jobs. Small businesses are also suffering. Dwight Francis of Valliant, Okla. launched a new biodiesel venture earlier this year when the local timber economy tanked. He was producing 12,000 gallons of biodiesel fuel per week by mid-year, and his business was viable, thanks to the $1/gallon tax credit. Now with the credit gone, he says he's shutting down the promising startup.
He bemoans, "By the time you buy the feedstock and the chemicals to produce the fuel, you have more money in it than you get for the fuel without the tax credit. We won't be producing any without the tax credit."
Congress and the U.S. Environmental Protections Agency have set the ambitious benchmark of producing 36 billion gallons of home-grown biofuel a year by 2022, reducing dependence on volatile foreign oil. The prospects of achieving that goal now look bleak, according to government officials. States Robert McCormick, principal engineer at the Department of Energy's National Renewable Energy Laboratory, "You could say the entire biofuels industry has had a rough year."
Despite these setbacks both optimism and debate on biofuels remains high. Many liken the departure from traditional gas combustion to EVs, fuel cell vehicles, and biofuel vehicles to be similar to other past modern technological breakthroughs such as the computer, internet, airplane, and railroad. These past innovations only reached consumers thanks to massive subsidies and investment of both money and land from the U.S. federal government. Many argue that similar investments are needed to allow the alternative energy transportation industry to reach viability. The real question, many say, is which candidate(s) is/are best to invest in (EVs, fuel cells, and/or biofuels) and when and how much should be invested.
This article is over a month old, voting and posting comments is disabled
RE: Are electric cars really clean???
1/4/2010 7:18:24 PM
Some interesting news.
"We shipped it on Saturday. Then on Sunday, we rested." -- Steve Jobs on the iPad launch
Study Indicates Hydrogen Cars' Lifecycle Emits More Carbon Than Gas Cars
December 31, 2009, 2:44 PM
BMW Mini E EV's Reception Chilled by Cold Weather
December 29, 2009, 12:23 PM
Chevy Volt Can't Handle Hot Southwest, but Otherwise is Looking Good
November 30, 2009, 1:51 PM
Not So Corny: Live From Platts Cellulosic Ethanol Conference 2008, Part I
October 13, 2008, 8:49 AM
Automaker Porsche may expand range of Panamera Coupe design.
September 18, 2016, 11:00 AM
Uber - Everyone's Autonomous Car Driver?
August 20, 2016, 6:01 AM
Volkswagens Vulnerable to Hacking Attacks
August 14, 2016, 1:08 PM
2017 Porsche Panamera: I’ll Take Three of These.
July 24, 2016, 6:44 PM
Ford, Toyota, and Universal Pictures Celebrate "Back to the Future Day' in Style
October 21, 2015, 4:19 PM
Consumer Reports Flexes Muscle, Hits Slumping Tesla Motors Stock
October 20, 2015, 4:13 PM
Most Popular Articles
5 Cases for iPhone 7 and 7 iPhone Plus
September 18, 2016, 10:08 AM
Laptop or Tablet - Which Do You Prefer?
September 20, 2016, 6:32 AM
Update: Samsung Exchange Program Now in Progress
September 20, 2016, 5:30 AM
Smartphone Screen Protectors – What To Look For
September 21, 2016, 9:33 AM
Walmart may get "Robot Shopping Carts?"
September 17, 2016, 6:01 AM
Latest Blog Posts
Who is in Risk of Getting Oral Cancer?
Sep 23, 2016, 6:02 AM
France Bans Plastic Eating Utensils in Restaurants
Sep 18, 2016, 10:49 AM
Progress Against Acute Myeloid Leukemia
Sep 17, 2016, 5:30 AM
Apple Watch Series 2 - Number 1 in the Customer Satisfaction.
Sep 7, 2016, 6:19 PM
First Self-Driving Car debut on the streets of Singapore
Aug 28, 2016, 4:10 PM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information