Missouri is the birthplace of biodiesel fuel, and there is arguably no state that has been more important for the industry. The “Show-Me” State has shown its commitment by making incredible investments in biodiesel infrastructure across the state, with Missouri currently home to seven biodiesel plants and 291 biodiesel retailers. As the number three producer of biodiesel in the nation, the industry supports over 3,000 jobs with a $1.7 billion economic impact for the state.
Renewable fuels have become an incredibly important tool in America’s move toward a more sustainable future. Biodiesel and renewable diesel are domestically produced, clean-burning, renewable substitutes for petroleum diesel. Fleets using biodiesel help increase energy security, reduce our reliance on foreign oil, improve air quality, and promote high-quality engine performance. Elected leaders like Missouri Representative Jason Smith have encouraged strong investment in this sector, increasing our production capacity and resulting in the U.S. rising to become the number one producer of biodiesel in the world.
But the biodiesel success story for Missouri and our nation is in danger.
Backed by the airlines’ lobbying, sustainable aviation fuel (SAF) tax credits were included in the IRA to offset production costs and assist the airlines seeking to increase their use of renewable jet fuel. While truck and heavy equipment operators have sought to reduce their carbon footprint over the past two decades by moving to renewable fuels like biodiesel, airlines have been slower to transition to renewables. Now, facing mounting criticism of their inaction from environmental groups, the airlines have gone to the Biden Administration and Congress to lower their costs for reducing their carbon footprint.
There are several concerns about the airlines’ approach, starting with the reality that the SAF tax credits are more than a cost reducer for the airline industry. Congress chose to favor the airlines and SAF over biodiesel and the trucking industry that makes up the backbone of our nation’s supply chain. At the airline’s urging, they created a significantly greater tax credit for SAF than for other biofuels produced right here in Missouri.
Consumers are going to bear the costs of Congress’ decisions through higher shipping costs, higher costs at supermarkets and stores, and higher costs for residential heating bills. Those higher consumer costs are unlikely to be offset by lower costs for flights or airline travel- airlines have raised their prices by nearly 43% since seeking this government assistance.
There are more issues than just the economic impact on consumers. Compounding an already bad decision, experts anticipate that the SAF tax credit at best will have a limited impact on achieving the airlines’ climate goals and could result in increased carbon emissions on our roads and our cities. This is because biodiesel, renewable diesel, and SAF are made from the same raw materials. Producing SAF is less efficient than producing other biofuels, such as renewable diesel. As producers increase their SAF production in response to the uneven incentives provided by Congress, America’s trucking fleet will be forced to return to petroleum diesel, which comes with higher costs and increased carbon emissions.
As the third largest biofuel producer in America, these unbalanced tax credits are especially harmful to Missouri. An industry born from the research of forward-thinking farmers should not be unfairly pigeonholed and handicapped so airlines can advertise “greener” flights. Bringing parity across biofuels so biodiesel and renewable diesel are in line with the tax credits of SAF will not only help to reduce costs, it will aid in reducing our carbon emissions as well. Our environment and our economy both depend on parity. We need leaders like Congressman Smith to ensure biodiesel is here to stay.
