Biodiesel production in the United States in 2015 reached a volume of 1.263 billion gallons, declining 1.2% from the 2014 level (1.278 billion gallons) (see Figure 1). Production from January to September 2016 was up 19.7% to 1.128 billion gallons compared with the same period last year (0.943 billion gallons). According to the December forecast by the U.S. Energy Information Administration (EIA, 2016a), 2016 U.S. biodiesel production is expected to increase 20.1% to 1.518 billion gallons/year (99,000 barrels/day) compared with 2015, and EIA projects a 5% biodiesel production growth in 2017 (1.594 billion gallons or 104,000 barrels/day).
The $1/gallon biodiesel tax credit implemented in 2005 has played a role in the development of the biodiesel industry. The tax credit has had extensions, and also has been allowed to expire temporarily, creating uncertainty in the industry. On December 2015, Congress retroactively extended the tax credit for two years, from January 1, 2015 through December 31, 2016.
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