Biodiesel Companies Folding Left and Right, After Gov't Cuts Tax Credit
January 4, 2010 10:30 AM
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.
"It seems as though my state-funded math degree has failed me. Let the lashings commence." -- DailyTech Editor-in-Chief Kristopher Kubicki
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
Tesla will announce electric lorry in September
April 19, 2017, 6:20 AM
Dubai announces passenger drone plans.
February 14, 2017, 7:56 AM
Lucky LA Residence
January 28, 2017, 4:00 AM
Debuted at CES 2017 - Corning Gorilla Glass Concept Car
January 7, 2017, 3:02 AM
Happy, healthy and feastive New Year to you and everyone in the world that about to celebrate the Season Holidays
January 1, 2017, 12:01 AM
In 2017, Here are the New Autos of 2018
December 30, 2016, 5:00 AM
Most Popular Articles
Surface Pro 5 Rumors - New Release Date and Price
April 22, 2017, 6:45 AM
ASUS RT-AC5300 – Ultimate Game & 4K Streaming
April 18, 2017, 7:45 AM
Dell Inspiron 17 7000 – A Premium Laptop featuring 7th Gen Intel Core i7 in a 2-in-1 Frame.
April 19, 2017, 7:45 AM
Meet the Smartphone with four cameras - Alcatel Flashphone
April 5, 2017, 11:20 AM
Vivo V5 Plus – the Selfie Softlight is on You.
April 17, 2017, 7:05 AM
Latest Blog Posts
Samsung Galaxy S8 – Warning for Pet Owners
Apr 24, 2017, 5:59 AM
Sound Bars and the Costs?
Apr 23, 2017, 6:30 AM
Link your Brain to Your Computer – In Four Years…Maybe
Apr 22, 2017, 7:03 AM
Google Home can now identify users by their voice.
Apr 21, 2017, 7:15 AM
Amazon Lex – Now Available for Developers.
Apr 20, 2017, 6:58 AM
You can now use Instagram offline on your Android Smartphone
Apr 19, 2017, 8:00 AM
Now you can livestream to YouTube from your mobile device.
Apr 18, 2017, 8:05 AM
Google Home – Is It a Spy Device?
Apr 17, 2017, 7:30 AM
Apple added to self –driving test permit list
Apr 15, 2017, 6:21 AM
Project Scorpio – Coming on June 11
Apr 14, 2017, 6:20 AM
Looks Like Samsung Has Been Forgiven.
Apr 13, 2017, 6:50 AM
United Airlines - Blasted on China’s Social Network and the Stock Market
Apr 12, 2017, 6:50 AM
Amazon's Third-Party Sellers Hacked
Apr 11, 2017, 6:25 AM
Microsoft Surface Pro5 Details Revealed
Apr 9, 2017, 6:41 AM
Own An Android Phone? Then you could be hacked over Wi-FI
Apr 7, 2017, 6:47 AM
Apple confirms iOS 10.3 bug and its effect on iCloud Services
Apr 6, 2017, 6:30 AM
Apple Rolls Out New Version of Apple Music
Apr 5, 2017, 10:35 AM
Apple in the News
Apr 4, 2017, 9:03 AM
Apple iPhones Will Soon Feature Graphics Chips Designed BY Apple
Apr 3, 2017, 6:23 AM
AMD Ryzen Desktop Processors Performance
Apr 2, 2017, 6:30 AM
What makes a camera Lensless?
Apr 1, 2017, 7:45 AM
Google halts Android Wear 2.0 Update Due to Bug
Mar 31, 2017, 7:27 AM
More Blog Posts
Copyright 2017 DailyTech LLC. -
Terms, Conditions & Privacy Information