The U. S. House voted May 28 to revive the $1-a-gallon biodiesel tax credit for this year as part of passing a mammoth jobs bill.

The bill now goes to the Senate, which is in recess until June 7, for a potential final vote. The biodiesel credit expired at the end of 2009. The revived credit would be retroactive to Jan. 1 to cover production throughout 2010.

While the biodiesel industry was cautiously optimistic, “we’re not out of the woods yet,” said Michael Frohlich of the National Biodiesel Board. “It’s passed the House now. It’s retroactive. That’s one step.”

There was concern throughout the week that the Senate might balk at the cost of the bill that includes the biodiesel credit. Frohlich said it was possible opponents would invoke rules that require a 60-vote majority to bring a bill to the floor.

Biodiesel production plummeted this year following expiration of the credit. The biodiesel board said reinstatement of the credit would put plants back in operation. The trade group says there are more than 150 biodiesel plants in 44 states.

Eleven per cent of soybean oil will be used to make biodiesel during the marketing year that ends on Sept. 30, estimates the Agriculture Department.

Two other biodiesel tax breaks would be extended as part of the bill – a 10-cent-a-gallon credit for small agri-biodiesel producers and a $1-a-gallon credit for diesel created from biomass.

A separate bill was pending in Congress to extend ethanol tax incentives and the 54-cent-a-gallon tariff on ethanol imports until 2016.