ACI: House Tax Code Reformers Should Examine Negative Impact of Biofuel Subsidies on U.S. Oleochemical Industry

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Mar 13, 2013, 11:39 ET

WASHINGTON, March 13, 2013 /PRNewswire-USNewswire/ -- House Ways and Means Committee members examining ideas to reform the tax code should look no farther than the negative impacts of the tax subsidies upending the U.S. oleochemical industry, according to the American Cleaning Institute (ACI – www.cleaninginstitute.org).

"We are not opposed to biofuels. We are opposed to misguided government subsidies that negatively affect the price and availability of animal fats, a key feedstock for the oleochemical industry," said Douglas Troutman, ACI Vice President and Counsel, Government Affairs.

"Energy tax credits, if used, should encourage the development and use of new raw materials that do not compete with established uses such as oleochemical production."

Members of the U.S. House Ways and Means Committee are undertaking a review of the Tax Code. ACI hopes that the unintended consequences of energy tax incentives utilizing tallow as a feedstock will come up in their discussions.

"Since passage of the 'American Jobs Creation Act of 2004,' government policy has increasingly driven and subsidized the diversion of animal fats to biofuel production via tax credit supports," said Troutman.

"The use of animal fats for oleochemical production has historically allowed the domestic industry to compete in the global market by providing a cost competitive raw material. That competitive raw material edge is now being profoundly eroded.

"There is a golden opportunity during these key discussions to recommend sound policies and get rid of loopholes that put the U.S. oleochemical industry and jobs at a disadvantage," said Troutman.

ACI represents the producers of oleochemicals, such as fatty acids and alcohols made from seed oils and animal fats, historically used in soaps and detergents.

The American Cleaning Institute^® (ACI - formerly The Soap and Detergent Association) is the Home of the U.S. Cleaning Products Industry^® and represents the $30 billion U.S. cleaning products market. ACI members include the formulators of soaps, detergents, and general cleaning products used in household, commercial, industrial and institutional settings; companies that supply ingredients and finished packaging for these products; and oleochemical producers. ACI (www.cleaninginstitute.org) and its members are dedicated to improving health and the quality of life through sustainable cleaning products and practices.

SOURCE American Cleaning Institute