Fuel retailers, trucking fleets, home-heating industry urge Congress to extend biodiesel tax credit

Photo: Joseph L. Murphy, Iowa Soybean Association

Trade associations representing fuel retailers, trucking fleets and the home-heating industry are urging Congress to extend the biodiesel blenders tax credit (40A), which expired Dec. 31 and is being replaced with the 45Z clean fuel production credit, regulations for which are not yet finalized.

NATSO, representing America’s truck stops and travel centers, SIGMA: America’s Leading Fuel Marketers, American Trucking Associations, the Clean Freight Coalition, Energy Marketers of America, the National Association of Convenience Stores, the National Energy & Fuels Institute and the Truckload Carriers Association are asking Congress to extend the longstanding, bipartisan $1-per-gallon tax credit in order to ensure that the current uncertainty in the advanced biofuel industry does not result in higher fuel prices at the pump.

Fuel retailers, distributors and blenders, trucking fleets and consumers of renewable fuels support tax policies that result in lower fuel prices.

Renewable diesel and biodiesel provide affordable, cleaner-burning fuel that reduces American dependence on foreign energy sources, stabilizes domestic fuel markets, and enables consumers to purchase more competitively priced diesel fuel.

Biodiesel and renewable diesel have historically been the most widely used biofuels in commercial trucking and remain the most viable option for reducing carbon emissions from the nation’s trucking, home-heating oil and rail industries.

“The expiration of the biodiesel tax credit at the end of 2024 has decimated biofuels supply chains,” the organizations said in a letter to the House ways and means committee. “Many biofuel production facilities, particularly biodiesel plants, have scaled back or are shutting down entirely. Consumers should not have to incur unnecessary cost increases for everyday goods like food, medicine and other essential commodities if stability is not restored to biofuels markets through an extension of the biodiesel tax credit.”

Economists predict inflation could rise 2.5 percent in 2025, elevating it to a top economic issue in the United States.

Restoring the biodiesel blenders tax credit is a concrete step that Congress can take to help mitigate inflationary threats that persist throughout the economy, including tariffs.

The biodiesel tax credit directly lowers the cost of diesel fuel for truck drivers, which in turn reduces shipping costs and helps lower the prices consumers pay for goods transported by truck.

Since its introduction in 2004, the biodiesel blenders tax credit has successfully motivated retailers to invest in infrastructure needed to support low-carbon fuel options, while also making renewable fuel blends more affordable for consumers.

The biodiesel blenders tax credit has been instrumental in developing a strong renewable diesel industry in the United States, driving significant growth in production.

The U.S. biodiesel and renewable diesel market expanded from approximately 100 million gallons in 2005 to around 4 billion gallons in 2023, all while contributing to lower transportation-related carbon emissions.