The U.S. biodiesel industry has set a new record for annual production, according to the latest EPA figures, proving the power that strong domestic energy policy has in creating U.S. jobs and boosting the economy.

The industry has produced more than 802 million gallons of biodiesel in plants from Florida to Iowa to Washington state, the figures show, more than doubling last year’s production of about 315 million gallons and breaking the previous record of about 690 million gallons set in 2009. The new record comes as a federal tax incentive for biodiesel was reinstated this year, and as the incentive is in danger of expiring on Dec. 31 without congressional action.

“I can say without question that this tax credit has helped us grow our production and hire new people, and it will play a big role in our growth going forward,” said Gabe Neeriemer, president of Patriot Biodiesel in Greensboro, N.C. “It will affect how many people we can hire, how much feedstock and equipment we buy, how many truckers we put to work delivering fuel.”

Patriot Biodiesel was forced to temporarily suspend operations when the tax credit expired in 2010. With the incentive restored this year, the plant is not only back online but is expanding production to about 5 million gallons per year and hiring a half dozen new employees.

“This incentive is working, and particularly in this kind of economy when politicians say they’re doing everything they can to create jobs, I can’t imagine why Congress would allow it to expire,” Neeriemer said.

The biodiesel industry’s rebound comes after Congress reinstated the fuel’s $1-per-gallon tax credit in December 2010. Without the incentive last year, production dropped dramatically as dozens of plants shuttered and thousands of people lost jobs.

This year’s increased production will support more than 31,000 jobs – up from fewer than 13,000 last year – while generating at least $3 billion in GDP and $628 million in federal, state and local tax revenues, according to a recent economic study conducted by Cardno-Entrix. In addition to creating jobs and economic activity, biodiesel is reducing U.S. reliance on foreign oil, bolstering economic and national security by diversifying our fuel supply, and reducing tailpipe pollution and greenhouse gases emissions.

“This tax incentive is without a doubt stimulating production of biodiesel and creating jobs. We’re clearly seeing that from our members across the country,” said Anne Steckel, vice president of federal affairs at the National Biodiesel Board, the trade association representing U.S. biodiesel. “We have a little over a month before it could expire again, and it is past time that Congress step up and pass an extension to keep this industry’s momentum going.”

Biodiesel is a renewable, clean-burning diesel replacement that can be used in existing diesel engines and meets a strict ASTM fuel specification. Made from an increasingly diverse mix of resources such as agricultural oils, recycled cooking oil and animal fats, it is the first and only commercial-scale fuel used across the U.S. to meet the Environmental Protection Agency’s definition as an advanced biofuel. It is produced in nearly every state in the country.

Source: National Biodiesel Board