WARRENVILLE --- A new biodiesel fuel plant in Aiken County has stopped producing because two federal tax credits have expired.
Green Valley Biofuels LLC at 2110 Main St. was scheduled to open later this month, but company president Chuck Pardue said the plant won't open until a $1 per gallon federal tax credit for blenders and another 10 cents per gallon for producers are restored. The subsidies expired Friday.
"We're laying off people and pretty much grinding to a halt as a result of the failure to renew the tax credit for biodiesel," Mr. Pardue said. "Without the tax credit, we would be operating in the red. We hope that Congress picks this up as soon as possible to fix this problem."
Green Valley stands to lose $1.1 million per month, he said.
Most biodiesel fuel plants nationwide have stopped producing because of the lapse in the federal tax credit, said Michael Frohlich, the director of communications for the National Biodiesel Board.
He said he hoped Congress would extend the tax credit.
"Hopefully, it will be sooner than later, but it could go into February or March. It will likely be a one-year extension, retroactive from Jan. 1," he said.
If the tax credit is not reinstated, plants would close and eliminate 23,000 jobs, Mr. Frohlich said.
Green Valley Biofuels LLC would be among those closing, Mr. Pardue said.
The $9 million Warrenville plant would create 25 jobs, including process operators, loaders and unloaders, chemist assistants and maintenance workers, he said. At full operation, the plant would run for three shifts, seven days a week.
It would produce 35 million gallons of biodiesel fuel a year from chicken fat, soybean oil or other materials.
"It's just not profitable to run the plants without the subsidy," Mr. Pardue said. "It's unfortunate that they've done this at a time when we're starting to make a difference."
The credit helped to offset the costs of producing biodiesel fuel, Mr. Pardue said.
"Our feed stock costs are quite high for soybean oil, chicken fat or whatever else we'll be using to make the fuel. This is to help us to be competitive so we'll be able to sell our biodiesel at nearly the same price as heating oil or number two diesel," Mr. Pardue said.
Despite the push to reduce greenhouse gases and the nation's reliance on foreign oil, the biodiesel industry has been having a difficult year. The industry is operating at only 15 percent of its potential capacity, according to the National Biodiesel Board, largely because the price of traditional diesel has fallen.
Diesel prices have dropped 18 percent since the beginning of the recession. In March, the European Union placed import tariffs on biodiesel and other biofuels, another hit for U.S. biofuel makers. Biodiesel had been the fastest-growing fuel for buses and dump trucks, but many have shifted to diesel.
Green Valley still needs the certification of its fuel from the U.S. Environmental Protection Agency, expected this month, Mr. Pardue said.
The plant will sell fuel to distributors and truck stops, and it is able to ship fuel by truck or rail.
Reach LaTina Emerson at (706) 823-3227 or email@example.com.