MONTPELIER, Vt. (AP) — A Vermont plant formed to produce soybean-derived fuel has shut down, and officials say one reason is the expiration of a federal tax credit for the production of biofuels.
The state's economic development authority is trying to recover $645,000 in low-interest loans it provided to Biocardel Vermont LLC in Swanton.
The Times-Argus reports the plant, in a former Agway location, was slated to produce as much as 8 million gallons of biodiesel a year.
The now-expired tax credit effectively gave companies $1 a gallon in tax breaks to make the production of the fuel made from soybean oil, waste cooking oil or other vegetable oils economically viable.
"We are trying to negotiate some kind of settlement for the balance of our loan," said Jo Bradley of the Vermont Economic Development Authority. "When the federal credits were not renewed, it was a blow to the industry as a whole. It made it much more difficult for them to survive."
Stephen Daigle, the plant's general manager, said Friday it was frustrating to see Biocardel just get to the verge of ramping up production last December after nearly two years of preparing and research and development, only to have the tax credits expire.
"People tried to help us as much as possible," Daigle said. "It's sad because I think Vermont as a green state would have supported it very well."
The state gave tax credits potentially worth $534,522 that Biocardel could have used to offset expenditures in payroll and capital investments between 2006 and 2010. However, since the firm never did all of the hiring and other requirements to receive those credits, nothing was collected in the end, said Fred Kenney of the Vermont Economic Progress Council.
Biocardel began limited production last fall. In December the firm, which employed three, began hiring to expand its operation, but that came to a halt.
Netaka White, biofuels director for the Vermont Sustainable Jobs Fund, said that while some biodiesel makers remain viable nationally and in Vermont, especially small producers that did not depend on the federal tax credits, the end of the federal assistance has been devastating.
"It has really put the entire national biodiesel industry into a state of suspended animation," White said. "It's not a level playing field with petroleum, which has benefited from huge subsidies."