Reps. Mike Carey, R-Ohio, and Mariannette Miller-Meeks, R-Iowa, on May 1 introduced legislation that aims to retroactively extend the $1-per-gallon biodiesel blenders tax credit (BTC) and the second-generation biofuel producer tax credit, which provides up to $1.01 per gallon for eligible fuels.
Both tax credits expired at the end of 2024 and have been replaced by the technology-neutral 45Z clean fuel production tax credit, which came into effect this year. The Treasury Department’s delay in releasing full 45Z guidance, however, is negatively impacting U.S. biofuel producers. The bill, H.R. 3079, aims to provide more certainty to biofuel producers by enacting a two-year extension of the expired tax credits. Language included in the bill would prevent taxpayers from claiming both the 45Z and legacy credits for the same gallon of fuel.
The BTC provides up to $1 per gallon for eligible biobased diesel fuels, including renewable diesel. The second-generation biofuel producer tax credit provides up to $1.01 per gallon for eligible fuels produced from cellulosic or algae-based feedstocks, including cellulosic ethanol produced from corn kernel fiber.
“Biodiesel is a homegrown resource that can support our long-term energy independence and support farmers, producers, and energy workers right here in Ohio,” Carey said. “With America’s energy dominance at stake, we’re working to strengthen our supply of biodiesel for years to come.”
“Iowa’s biofuels production fuels America and powers our economy,” Miller-Meeks said. “Iowa producers need market certainty to continue producing affordable, low-emissions forms of energy. I am thankful for Rep. Carey’s collaboration on this commonsense bill which will lower energy costs and emissions, and promote the production of biofuels to further President Trump’s America First agenda for energy dominance. I look forward to getting this bill to his desk.”
The bill has earned support from the American Trucking Associations, Clean Freight Coalition, Energy Marketers of America, Illinois Soy Association, National Association of Convenience Stores, National Energy & Fuels Institute, NATSO, Representing America’s Travel Centers and Truck Stops, Renewable Fuels Association, Sustainable Advanced Biofuels Refiners, SIGMA: America’s Leading Fuel Marketers, National Tank Truck Carriers, and Truckload Carriers Association.
“The expiration of the biodiesel blenders tax credit (40A) along with the lack of implementing regulations on Section 45Z have effectively shut the biodiesel industry down for all of 2025, with no end in sight,” said Joe Jobe, CEO of the SABR Coalition. “This bill to extend 40A would turn the markets back on immediately because the implementing regulations for 40A are already in place and the markets understand them.”
According to the SABR Coalition, the two-year tax credit extension proposed by the legislation would provide time for Congress to fix fundamental flaws in the 45Z credit. It would also allow time for the Trump administration to propose and finalize regulations implementing the 45Z credit.
“The biodiesel industry is in a world of hurt,” Jobe said. “It’s not just the biodiesel industry that is largely shut down, but the entire value chain is shut down. Farmers can’t sell their beans to crushers, who can’t sell their soybean oil to biodiesel producers, who can’t sell their fuel to distributors and byproduct to glycerin refiners. And those fuel distributors can’t sell their fuel to truck-stop operators, and glycerin refiners can’t sell their refined material to numerous, wideranging industries that rely on it for their products, including sewage treatment plants that use glycerin and enzymes in their water treatment processes. So, this doesn’t just impact biodiesel producers—several separate industries are involved in the value chain, and they’re all being devastated by the biodiesel industry being shut down by government inaction.”
