WASHINGTON, (Reuters). – The future of the biodiesel market is in unstable land, because the closing of the legal lagoon of a fiscal credit and new European import tariffs could reduce the trade, said the Energy Information Administration. Â

It is expected that in 2009 in United States and with the standards of the renewable fuel, 500 million gallons (1900 million liters) of biodiesel be blended with diesel, a biofuel elaborated starting from oils or of animal fats. Â

The figure should be increased by law to 1000 million biodiesel gallons for 2012. This, together with the rise of the fuel prices, generated an increase in the production in the last years, and the tributary incentives sent great part of the fuel to the foreigner, in accordance with the EIA.Â

“However, the perspectives for this year of the biodiesel market of United States continues being highly uncertain”, said the agency in their weekly revision of the petroleum market. The tax credit of 1 dollar per gallon for the biodiesel blended with petroleum diesel, known as the Blender Tax Credit (BTC), was extended until year end. But a legal lagoon in it that stimulated the trade was covered in October as part of the economic stabilization law of 2008.Â

The legal lagoon would allow the operators to add a small quantity of petroleum diesel to the imports of pure biodiesel and then to export the new mixture to take advantage of the fiscal credit.Â

“To add only 1 gallon of conventional diesel to 1000 gallons of biodiesel was enough as to qualify for the BTC”, specified the report of the EIA. While the legal lagoon existed, the biodiesel imports grew from 4 million gallons in 2004 up to 315 millions last year, as it was considered.Â

Source: La Nación