Texas Rep proposes bill to eliminate tax credits for biodiesel from animal fats

April 17, 2017 |

In Washington, legislation introduced by U.S. Rep. Randy Weber (R-TX) would permanently put a stop to federal tax credits for biofuels produced with animal fats, according to the American Cleaning Institute (ACI).

ACI, the trade association for the cleaning product supply chain, says the bill (H.R. 1866, the “Stop Animal Fat Tax Credits Act”) would prevent the renewal of tax credits for biodiesel and renewable diesel that is produced from animal fats, which until the end of 2016 were eligible for a $1 per gallon tax credit.

ACI’s member companies include the producers of oleochemicals, such as fatty acids and alcohols made from seed oils and animal fats, historically used in soaps and detergents.The biofuel subsidy in question distorts the domestic market for animal fats by diverting this important raw material away from use in the manufacturing of cleaning products and towards the production of biodiesel. As a result, animal fats have seen a 116 percent increase in cost since 2006, the year the tax credit first became law. The Joint Committee on Taxation estimated eliminating the tax credit for biofuels that use animal fats would have saved $299 million in fiscal year 2016.

Category: Fuels

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