Contacts: Shelly Baron, 501-537-0190 or
Steve Patterson, 501-537-0190

Sen. David Wyatt, Rep. James McLean introduce alternative fuel production tax credit to protect Arkansas jobs  

(Little Rock, AR) Legislation was introduced by State Sen. David Wyatt (D-Batesville) and Rep. James McLean (D-Batesville) to establish a 10 cents per gallon production tax credit for alternative fuels that will help level the playing field for Arkansas producers who are losing production contracts to producers in neighboring states like Mississippi and Missouri that offer generous incentives, according to the Arkansas Advanced Energy Association (AAEA). 

AAEA has endorsed the Wyatt-McLean bill (SB933) as a prudent investment in job growth in the Arkansas Delta, which is home to all Arkansas alternative fuel producers and where the unemployment rate is routinely more than a full percentage higher than the state average.  

Sen. Wyatt and Rep. McLean, represent an area of the state where the biofuels industry supplies hundreds of jobs.  However, because neighboring states like Missouri, Mississippi and Texas are providing generous state incentives to their biofuels producers, Arkansas producers like FutureFuel Chemical Co. of Batesville and Pinnacle Biofuels of Crossett are losing production contracts to competitors in those states.  

Other original cosponsors are Senators Keith Ingram (D-West Memphis) and Ronald Caldwell (R-Wynne), Representatives Charles Armstrong (D-Little Rock), Eddie Armstrong (D-North Little Rock), Ann Clemmer (R-Benton), Bruce Cozart (R-Hot Springs), Joan Dickinson (D-Newport), John Edwards (D-Little Rock), Justin Harris (R-West Fork), John Hutchison (R-Harrisburg), Joe Jett (D-Success), Sheila Lampkin (D-Monticello), Homer Lenderman (D-Brookland), Stephanie Malone (R-Fort Smith), Mark McElroy (D-Tillar), James Ratliff (D-Imboden), Chris Richey (D-West Helena), Fred Smith (G-Crawfordsville), Tony Thompson (D-Morrilton), and Tommy Wren (D-Melbourne).

“In the Arkansas Delta, where job opportunities are needed, the biofuels industry is a significant employer,” said Senator Wyatt.  “With the abundance of biomass resources in our region, the bioenergy sector can help revitalize the rural economy in East Arkansas.  This modest tax credit is a fiscally responsible solution that industry leaders say will allow them to compete for production contracts that they are currently losing to companies in Mississippi, Missouri, Texas and other states.”

“The Alternative Fuel Production Tax Credit is an investment in the innovation that is occurring in the biofuels industry in East Arkansas,” said Representative McLean.  “Our neighboring states have already recognized the economic opportunity that exists in biofuel production and we need to level the playing field for our producers.”

Currently, Mississippi provides a production tax credit of 20 cents per gallon for alternative fuels.  Texas exempts biodiesel from the state tax on diesel fuel while Oklahoma, Kansas, Missouri, Iowa, Illinois, and Kentucky all provide significant incentives for biodiesel production.

Because of its on-site technical expertise, FutureFuel Chemical Co. in Batesville has emerged as an industry leader for its innovation and the quality of its biodiesel product, especially for its superior wintertime performance.  However, generous incentives offered by neighboring states are causing FutureFuel to lose profitable production opportunities.

“A financial incentive from the state would enable FutureFuel and other biodiesel producers in Arkansas to secure a larger portion of the annual EPA mandated biodiesel blending requirement,” said Gary McChesney, FutureFuel Chemical Company Chief Technology Officer and Chairman of the AAEA Board of Directors.  “If Arkansas biodiesel producers are able to obtain a greater portion of the annual biodiesel mandated volume, Arkansas would experience growth in investment, employment, and stimulate supporting economic activities such as trucking and feedstock production.”

Pinnacle Biofuels in Crossett was established in 2007 with 100 percent private investment and began production of biodiesel using poultry oil as a feedstock in 2008.  The company recently lost business to a Missouri competitor because that state has production incentives for biofuels producers.

“If we had received a ten cents per gallon tax credit over the last several years of doing business, it could have made the difference in being able to produce and keep employees working on a steady basis,” said Brad Dobson, plant manager at Pinnacle Biofuels. “Bordering states with production credits are causing Arkansas producers like Pinnacle to lose revenue and jobs.  It is very important to our company and the surrounding area to get this legislation passed.”  

The legislation would amend Act 873, which created the Arkansas Alternative Fuels Development Program, by adding language that provides a 10 cents per gallon tax credit on alternative fuels produced in Arkansas.  

To read a summary of the Alternative Fuels Production Tax Credit legislation, click here:

Arkansas Advanced Energy Association is a business group dedicated to growing Arkansas’s economy by expanding our energy workforce and manufacturing base through the increased development, manufacture, and utilization of advanced energy technologies.

The Arkansas Advanced Energy Foundation is the educational affiliate of the AAEA.  The Foundation promotes greater public understanding of advanced energy in Arkansas through research, public education programs and economic and workforce development. The Foundation is dedicated to informing the energy policy debate with well-researched, fact-based data on the advanced energy economy in Arkansas and by providing a public forum where state leaders can address Arkansas’s energy challenges for the future.

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