(Radio Iowa) – The head of the Iowa Biodiesel Board says producers are welcoming an executive order meant to streamline the process of claiming a tax credit for producing low emission fuels, but there’s still uncertainty. Grant Kimberly says some of the larger biodiesel producers are in a better position to claim the 45-Z credit. But smaller, independent producers have to work through a third party to sell the credit, and often have to wait several weeks and in some cases up to a year to get paid.
“When you have to buy your feedstock every month, and make sales every month, and then when you really don’t get all your value for your sale immediately,” Kimberly says, “but you’ve got to turn around and buy more feedstock, that makes it a very challenging cash flow situation.” While the industry has had a few difficult years, Kimberly says he’s cautiously optimistic about the future. Almost all of the Iowa biodiesel plants that were idle at this time last year are now running. He says it was a challenge holding onto highly-skilled workers through the period of low demand.
“I would say most of the biodiesel producers held on to their core staff at least, so they are able to operate and run,” he says, “but to operate at a more highly efficient level and to try to maximize their capacity in a better way, they’ll need a bigger workforce and so that’s going to take some time.” President Trump signed the executive order, dubbed the “Regenerative Feedstock Rule,” last month.
Kimberly says the Energy and Treasury Departments still need to finalize rules for quantifying the greenhouse gas reductions of biofuel production and determine exact credit eligibility.
