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Local Business

Project halted because of tax credit uncertainty

Construction on a $30 million improvement project at Renewable Energy Group's Seneca biodiesel plant has been halted due to uncertainty over the future of the biodiesel tax credit, company officials announced Nov. 7.
Construction on a $30 million improvement project at Renewable Energy Group's Seneca biodiesel plant has been halted due to uncertainty over the future of the biodiesel tax credit, company officials announced Nov. 7.

Renewable Energy Group announced Nov. 7 that it is halting construction on a $30 million improvement project at its Seneca biodiesel plant because of the prolonged lapse of the federal biodiesel tax credit.

Company officials say the 22-month gap since the credit was last in effect and uncertainty about when it would be reinstated forced the postponement of further work on the project that involved about 100 contract workers.

“This is another painful example of how Congress’s continued failure to reinstate the biodiesel tax credit is having a very real and very negative impact on working families across the country,” REG President and CEO Cynthia Warner said.

“Their inaction has forced us to make another difficult decision. We closed one of our other plants earlier this year. And now, we have had to stop a project that would help us utilize more waste feedstocks at Seneca. Our contractors had to tell a lot of good, hardworking people that they can’t come back to work here because our government has not come through.”

REG’s announcement comes on the heels of many biodiesel plant shutdowns across the country, impacting thousands of jobs.

The move by REG is another example of how the biodiesel tax credit impacts more than just biofuel producers, the company noted. The U.S. biodiesel industry supports more than 60,000 jobs, $2.5 billion in wages and $11.4 billion in economic impact.

Now, this impact is being felt by Illinois contractors like DePue Mechanical in Minooka, which took the brunt of the REG postponement.

“These are construction workers, engineers, plumbers, electricians and pipe fitters that are not contributing to the local economy now because the federal government has not gotten their job done,” said Jim Jacobsen Jr., president of DePue Mechanical. “This takes away economic opportunity for Seneca, Grundy County and Illinois.”

The $1-per-gallon credit has lapsed six times since 2004. The current lapse is the longest by far, amplifying instability and hindering growth.

“Biofuels champions continue to show up for us, but now is the time for Congress to act,” said Tim Mann, REG Seneca plant manager. “The industry needs immediate reinstatement so communities can take advantage of all the economic benefits of biodiesel production.”

Renewable Energy Group Inc, (Nasdaq: REGI) is leading the energy industry transition to sustainability by transforming renewable resources into high-quality, cleaner fuels. REG is an international producer of cleaner fuels and North America’s largest producer of biodiesel.

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