Saturday, April 1, 2023
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REPORT: Gov’t Wastes Billions Propping Up Biodiesel Fuel Industry

‘We are subsidizing something that already happened absent the subsidy…’

Media Fake News: Economic Growth Isn't Fueled By Soybean Exports
Photo by UnitedSoybeanBoard (CC)

(Ben Sellers, Liberty Headlines) A report released by a tax-reform advocacy group said the federal government propped up the dubiously efficient biodiesel fuel industry with $12 billion in subsidies over the past decade.

Taxpayers for Common Sense noted in the report, titled “Biodiesel Bonanza,” that the biggest offender, the biodiesel tax credit, has since expired but that some lawmakers were trying to resurrect it and even apply it retroactively.

Corn, soy, palm and and other crops cultivated as renewable energy sources may also pose potential environmental and health consequences, said a statement accompanying the report’s release.

Among the issues they create are greater land-use demands that result in habitat loss, water pollution, water treatment costs and a detrimental effect on public health.

“With more than half of US biodiesel sourced from virgin soy this massive tax credit not only negatively impacts taxpayers, it also harms food production and the environment,” said TCS president Ryan Alexander.

“At the end of the day, biodiesel subsidies distort energy markets, raise fuel prices and waste taxpayer dollars, and do little to promote long-term sustainable energy policy,” she said.

Nonetheless, following an extensive lobbying campaign by biodiesel backers, the House Ways and Means Committee and Senate Finance Committees may take up a proposal to renew the subsidy when Congress reconvenes from its spring recess, TCS said.

“It is no surprise lawmakers are pushing expensive plans to extend the biodiesel tax credit backwards and forwards,” it said. “Industry boosters have been heavily lobbying for months.”

One proposal, TCS said, would cost taxpayers $19 billion by extending the credit retroactively for 2018 and continuing it for the next five years.

Alexander said such a retroactive extension for an agricultural enterprise defied logic since there is no way to retroactively change last year’s crop production.

“[W]e are subsidizing something that already happened absent the subsidy,” she said.

TCS also accused the biodiesel producers of playing political games with their past production numbers, drastically boosting their crop in three years when they knew they would benefit from the subsidy, then leveling off in subsequent years.

“[A]fter more than ten years of lavish taxpayer support, it’s time for the biodiesel industry to stand on its own two feet,” Alexander said.

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