| Biodiesel production, distribution, and use, as with | | | | company sells the biodiesel retail which is then used in |
| many emerging alternative energies, has been aided | | | | the fuel tank of the buyer. |
| in large part by recent government incentives making | | | | The tax credits on Straight Biodiesel are equal to $1 |
| biodiesel fuel production and distribution more | | | | per gallon of agri-biodiesel and $0.50 per gallon of |
| attractive. These tax incentives put money back in | | | | waste grease biodiesel. The tax credits on Biodiesel |
| the pockets of biodiesel producers who, presumably, | | | | Mixtures are $0.01 (a penny) per percentage point of |
| pass the benefits on to you, the consumer, with | | | | agri-biodiesel and $0.005 (half-a-cent) per percentage |
| lower biodiesel prices. | | | | point of waste grease biodiesel. |
| Not just any biodiesel is eligible for tax incentives. The | | | | That is, unless the amount of credit approved to |
| definition of biodiesel fuel, as its used for tax | | | | taxpaying biodiesel companies applying for the credit |
| purposes, is monoalkyl esters of long chain fatty | | | | in a given year exceeds the annual cap of $1.5 million, |
| acids. Biodiesel production companies seeking any of | | | | in which case the Department of Revenue will |
| these credits must ensure that they are making | | | | prorate credits to biodiesel production companies |
| biodiesel fuel that meets the Environmental Protection | | | | accordingly. |
| Agency (EPA) requirements for registration of fuels | | | | These tax credits, however, are currently temporary, |
| and fuel additives as described in the Clean Air Act, | | | | and set to expire in 2008 an added incentive to get |
| as well as requirements put forth by the American | | | | started now on that biodiesel production company of |
| Society of Testing and Materials. | | | | your own that youve been dreaming about. Theres |
| All companies, whether a biodiesel production | | | | literally no time to waste. |
| company or not, that are selling or using biodiesel | | | | Another Federal Tax Credit, the Small Agri-Biodiesel |
| may qualify for the Biodiesel and Ethanol (VEETC) | | | | Producer Credit (Section 1345: Energy Policy Act of |
| Tax Credit, on their income taxes. There are two | | | | 2005), grants $0.10 per gallon on up to 15 million |
| such types of credit.the Straight Biodiesel Credit | | | | gallons to small agri-biodiesel production facilities |
| (considered a general business credit by the IRS) the | | | | producing less than 60 million gallons per year. |
| biodiesel in question must not have been mixed with | | | | Incidentally, there are local and state tax credits all |
| any petroleum-based diesel fuel, and the company | | | | over the country available on biodiesel cost and costs |
| itself must be the biodiesel production company | | | | on other alternative fuels. Visit: to find out what your |
| making it;the Biodiesel Mixture Credit the biodiesel in | | | | locality offers. |
| question must contain only biodiesel fuel and | | | | According to recent U.S. Department of Agriculture |
| petroleum-based diesel, with absolutely no kerosene | | | | (USDA) study, demand for biodiesel production is set |
| added, and the company itself must be the biodiesel | | | | to increase by at least 124 million gallons per year, |
| production company making it. | | | | however fears about the rapidly rising prices of crude |
| Additionally, for either tax credit on biodiesel cost, | | | | oil suggest that facilities might be making biodiesel |
| one of the following criteria must also be met;othe | | | | fuel in even larger amounts and at an even faster |
| biodiesel production company actually uses the | | | | rate. |
| biodiesel itself as a fuel;othe biodiesel production | | | | |