The federal tax credit that made biodiesel an affordable alternative fuel expired on January 1, in effect paralyzing what was a growing industry throughout the country.

U.S. Senator Chuck Schumer (D) was in Ontario, Wayne County Thursday reassuring New York's only commercial biodiesel producer that he is fighting to get that dollar per gallon subsidy reenacted by the end of next month.

"We'd be at full production right now if it wasn't for the incentive. I don't want to blame it on the incentive, but many of our customers did cancel because of it," John Vavalo, Northern Biodiesel Senior Vice President said.

Vavalo said the plant produces no by-product or waste, but has created seven jobs at the plant and several spinoff jobs in the rail and trucking companies that transport the biodiesel, and on the local farms that grow necessary ingredients.

"It's made here. It’s sold here. All of our feedstock comes from here and all of the money that my employees and that we make here we put back into the local economy," Vavalo said.

Vavalo said Northern Biodiesel has the capability to produce one million gallons of biodiesel a month for diesel engines, generators or heating oil.

The plant is only operating at quarter capacity.

It's one of only 20 of the country's 179 biodiesel plants still producing since the federal government allowed the dollar per gallon tax credit to expire.

"It has paralyzed our industry," Northern Biodiesel owner Bob Bechtold said.

Northern Biodiesel said New York State hasn't made its situation any easier. Many other states offer incentives for biodiesel production.

Governor David Paterson is now threatening to eliminate the states mandate to buy renewable fuels.

"I'm gonna lead the fight to see that the tax credit is renewed,” Senator Schumer said, “Hopefully it will be done before March 31. It's scheduled, it's on the ledger and it will be done retroactively. So all the biodiesel you made from January 1 when the credit expired to the time it passes you'll also get the credit for. So, keep makin’ the stuff, don't stop."

Senator Schumer said he will also urge the governor to continue his mandate for renewables.

"Renewable energy is gonna be one of our major growth industries in upstate New York and the Rochester area. We know that we cannot continue with fossil fuels and foreign oil and biodiesel is a great, great future," Schumer said.

A future that could dry up if federal and state governments don't act soon.

"The problem is time. The longer it takes, the more money we're out and the closer we come to having lay people off," Vavalo said.