[Sustainable-biodiesel] Credit for WVO sold or used as a fuel

[Jason Burroughs]

I know this is slightly outside the scope of this group, but I have 
found something that may be of interest to some in our community.

The publicly traded rendering company Darling International posts in 
their quarterly and yearly reports that they have received over $1 
million in federal tax credits due to using their own "fats, oils, and 
greases" as fuel for their burners. They say the IRS accepted the forms, 
the US Treasury has sent them the checks, and that their auditors feel 
confident that recent rulings and the energy bill will reaffirm their 
position. However, they haven't put it on their P&L sheet yet, but are 
holding it as deferred income until the IRS officially clarifies the credit.

Has anyone heard good or bad about filing for the 50 cent tax credit for 
waste oil as fuel? I'm about to file my 720 form from last quarter and 
intend to do so. We'll pay 18.4 cents per gallon on the oil we sold for 
on-road purposes, and no tax on the oil we sold in bulk to those 
interested in making biodiesel or other projects.

Here is from the 2006 year end statement:

The Company has the ability to burn alternative fuels at some of its 
plants to
help manage the Company's exposure to high natural gas prices. Due to high
natural gas costs, during Fiscal 2006 the Company used alternative fuels 
at some
of its plants that have the ability to burn alternative fuels. The Company
expects to continue to burn alternative fuels at these plants in future 
periods
as long as natural gas prices remain high. In addition, the Company began to
file in the fourth quarter of 2006 with the government for the 
Alternative Fuel
Mixture Tax Credits that started on October 1, 2006 for the use of 
alternative
fuel mixtures related to the Company's burning fat to fuel boilers. If the
Company's application to the IRS for the utilization of Alternative Fuel 
Mixture
Tax Credits in fiscal 2007 is approved, the recovery amounts received by the
Company related to the fourth quarter of 2006 was insignificant. 
Depending on
natural gas prices and the market price of fat in fiscal 2007 the 
Company will
make the decision on whether to burn fat or natural gas based on their
respective prices. If the Company's application to the IRS for the 
utilization
of Alternative Fuel Mixture Tax Credits is approved, the recovery amounts
received, if any, from the government for Alternative Fuel Mixture Tax 
Credits
in fiscal 2007 could be material.

And here is a blurb from Q3 2007:
"As of September 29, 2007, the Company has applied for approximately 
$1.9 million in Alternative Fuel Mixture Credits and has received 
approximately $1.7 million from the IRS relating to these credits, which 
are included in current liabilities on the balance sheet as deferred 
income."

And from their investor presentation:

Alternative Fuel Mixture Tax Credit
-pays Darling 50 cents per gallon to burn fats/greases in our boilers
-Opportunistic calculation versus natural gas
-Limited to no capital involved
-Current subsidy is through 2009
-Proposed legislation extends through 2012

This is a major step for us, and I'd like any feedback or comments from 
anyone.

Jason Burroughs
DieselGreen Fuels
Visit our website <http://www.dieselgreenfuels.com>
512-391-0569
512-992-8677