Missouri governor signs biodiesel retail, production tax credits into law
Missouri Gov. Mike Parson signed legislation Oct. 5 creating new incentives for biodiesel consumption and production in the state. Missouri’s new law will help drive biodiesel demand, add value to Missouri-grown soybeans, and provide the state’s citizens with a domestically made fuel that helps lower fuel prices.
“The biodiesel industry is an important partner for farmers and entrepreneurs in Missouri and across the Midwest,” Parson stated. “We are proud to support this industry that helps create good-paying jobs while ensuring our nation benefits from homegrown fuels that provide energy security and environmental benefits.”
HB 3, recently passed by the Missouri Legislature during a special session called by Parson in August to focus on extending agriculture incentives, provides a 2-cent-per-gallon (cpg) tax credit for B5 to B10 blends of biodiesel and a 5 cpg incentive for biodiesel blends greater than B10 but less than B20 sold at Missouri fuel-retailer locations.
The bill also establishes a 2 cpg tax credit for biodiesel produced in the state.
The legislation allows for a total of up to $20 million a year to fund the program, with $16 million for biodiesel retail blends and $4 million for the biodiesel production tax credit.
The incentives are effective Jan. 1, 2023, and sunset Dec. 31, 2028.
The legislation was spearheaded and guided through the legislative process by the Missouri Soybean Association partnering with Clean Fuels Alliance America and several of its member companies.
HB 3 was sponsored by Rep. Brad Pollitt of Sedalia and carried in the Missouri Senate by Sen. Jason Bean of Peach Orchard.
“We congratulate Missouri on this significant legislation and thank Gov. Parson for helping to strengthen the biofuels corridor throughout the Midwest,” said Clean Fuels CEO Donnell Rehagen. “Missouri joins the ranks of Iowa, Illinois, Minnesota and others with some of the most forward-thinking legislation that values the production and use of biodiesel. It is our nation’s best option here and now to decarbonize heavy-duty transportation.”
Jeff Earl, Clean Fuels’ director of state regulatory affairs, added, “Supporting biodiesel also helps lower fuel prices. Recently, the World Agricultural Economic and Environmental Services released a study showing that availability of biodiesel boosts the fuel supply and consequently reduces the price of diesel at the pump by 4 percent on an average annual basis. This equates to more than 20 cpg savings to consumers and the domestic supply chain at today’s prices.”
Missouri’s biodiesel industry adds around $266 million in value to the state’s soybean crop. Missouri is third in the country in biodiesel production with seven biodiesel plants employing more than 3,200 Missourians. In total, the Missouri biodiesel industry adds a total economic impact of over $1.7 billion to the state and supports more than $191 million in Missouri household income.
More information on the legislation can be found here.
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