WASHINGTON, D.C. — In renewable fuels, ethanol usually gets the press. It has gained more national attention in the last year by way of NASCAR and the motorsport giant’s extensive use of the fuel in the 2011 season.

But biodiesel enjoyed it biggest year production-wise in 2011. So the end of blenders’ credits – which had helped the biofuel industry as it developed – was not the most welcome news for the biodiesel sector.

Ben Evans, spokesman for the National Biodiesel Board (NBB), said it is too early to tell if the end to the tax incentives will affect the industry, but he thinks the credits, along with the Renewable Fuel Standard (RFS), were successful in terms of public policy.

“It clearly stimulated biodiesel production to record levels and we’re still hopeful that Congress will pass something in the next couple of months to reinstate it,” he said. “Without it, we think at best we will maintain the 2011 production levels and at worst, we could see a dip in production and plants to close and layoffs. No one wants that in this kind of economy or at any time, so we are working hard to try and convince Congress that it is a worthwhile investment.”

Those record levels equated to approximately 1 billion gallons in 2011 and in Kentucky, that affects a lot of businesses. From school buses in Jefferson County to equipment at the UPS World Port at the Louisville International Airport, to extensive use in the mining industry as a way to reduce underground emissions, biodiesel has made its way into many sectors of the Bluegrass State, including at the retail level, according to Evans.

He noted there are fundamental differences between the biodiesel and ethanol industries that would warrant a return to some type of a tax credit continuance for biodiesel production.

“First, we’re just a much younger industry. We’ve had commercial scale production for about six years and we’ve had our tax credit since only 2005,” Evans said. “The ethanol industry had a tax credit for about 30 years. And they’re just a much more mature industry and a much larger industry. They did 13 or 14 billion gallons the last few years, I think.”

Upon termination of the blenders’ credits, a post on the Renewable Fuels Assoc. website stated: “The domestic ethanol industry has evolved, policy has progressed and the market has changed, making now the right time for the incentive to expire.”

At the end of 2009, a $1 per gallon tax credit for biodiesel production was allowed to expire, creating turmoil in the industry until Congress reinstated it in March 2010, through 2011. Evans said it was that event that shows how necessary a tax credit is to the industry at this time.

“I think that clearly showed that our industry is still young and still needs some support to grow,” he said. “We think the benefits the nation gets in terms of domestic production, jobs and economic activity, in terms of national security and energy security and in terms of the environment, clearly outweigh and are well worth the cost.”

What corn is to ethanol, soybeans are to biodiesel, and while not on the same scale ethanol and corn enjoy, farmers have a lot at stake when it comes to the industry. According to the Energy Information Administration, “the most common sources of oil for biodiesel production in the United States are soybean oil and yellow grease (primarily, recycled cooking oil from restaurants).”

Evans said biodiesel has been a way for soybean producers to find a new market for their product.

“Obviously, soybeans are grown primarily for the meal, but the oil is a valuable commodity as well, and I think what the biodiesel industry does is add value to that,” he said. “There are a lot of studies, in fact, that suggest that it has helped relieve pressure on the meal price and helped keep it in check. I think the continued growth of the biodiesel industry will only continue that dynamic.”

Evans said soybean oil makes up about half of the biodiesel feedstock in the United States, with the rest coming from products like animal fats, yellow grease, corn oil that is a byproduct of ethanol production, canola oil and cotton seed oil, among others.

According to information from the United Soybean Board, biodiesel represents 14 percent of annual soy oil demand. The agency also funded a recent study that shows how biodiesel production continues to affect soybean producers in a positive way.

The NBB released information noting that study had found “the biodiesel industry’s demand for U.S. soybean oil supported U.S. soybean prices by as much as 27 cents per bushel over the past five years, bringing U.S. soybean farmers an additional $2.7 billion in net returns.”

Evans said the NBB remains positive despite the loss of tax credits, and the agency continues to work toward growing the volume of biodiesel mandated by the RFS. “We think that biodiesel is increasingly accepted in the market as an advanced biofuel and has tremendous benefits,” he said.