Renewable Energy Group (REG) announced this week the company is halting construction on a $30 million improvement project at its Seneca biodiesel plant due to 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 nearly 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,” said REG President & CEO Cynthia “CJ” Warner. “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, hard-working 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 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, Illinois, 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. This takes away economic opportunity for Seneca, Grundy County and Illinois,” said Jim Jacobsen, Jr., President of DePue Mechanical.
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.”
In July, REG opened the company’s first diesel fueling station. Located off of Shipyard Road, that 24/7 station is open to all diesel vehicle owners from semi fleets to local farmers.