Nebraska governor signs bill promoting biodiesel use

Nebraska Gov. Jim Pillen signed into law legislation promoting the sale and use of biodiesel in the state.

The bill, LB 727, provides retail tax incentives for the sale of biodiesel at fuel-retailer locations throughout the state, adding value to Nebraska soybean farmers while promoting continued growth of the burgeoning renewable fuel industry.

Part of an omnibus revenue bill, the Nebraska Biodiesel Tax Credit Act provides a 14-cent-per-gallon credit for the sale of biodiesel*.

The credit is applied to a Nebraska fuel retailer’s income-tax liability.

Total funding for the program is $5 million.

“We applaud Gov. Pillen for signing legislation that will continue to strengthen the momentum of a growing biodiesel market,” said Donnell Rehagen, CEO for Clean Fuels Alliance America. “Nebraska has responded to the call to decarbonize through this forward-thinking legislation that promotes the production and use of biodiesel, a homegrown fuel from homegrown feedstocks.”

The proposal was introduced by Sen. Tom Brandt of Plymouth and amended to LB 727, which was shepherded through Nebraska’s unicameral legislature by Sen. Lou Ann Linehan of Elkhorn.

The biodiesel proposal received overwhelming support from Nebraska’s agriculture industry, biodiesel producers and fuel marketers.

The legislation ultimately passed unanimously by the Nebraska Senate.

“This legislation recognizes the impact biodiesel has on the demand for soybean oil,” said Courtney Lawrenson, a Clean Fuels governing-board member and AGP vice president of oils and energy. “AGP has long recognized the steady growth of the soybean processing industry with plans to expand feedstock-production capacity in David City and applauds lawmakers for solidifying Nebraska’s leadership role in the industry.”

Nebraska is a leader in soybean production—among the top-six soybean-producing states.

In 2022, the biodiesel industry in Nebraska supported an estimated $322 million worth of overall value to Nebraska soybeans.

For a Nebraska farmer with 500 acres, the biodiesel and renewable diesel industry supports about $28,400 to their bottom line.

“Passing the Biodiesel Tax Credit Act is a win for Nebraska producers and consumers,” said Lori Luebbe, executive director for the Nebraska Soybean Association. “It reinforces the commitment to making renewable fuels an integral part of our state’s energy portfolio. We appreciate the support of Gov. Jim Pillen, Sen. Tom Brandt, and members of the legislature for ensuring biodiesel is a part of Nebraska’s clean-energy solution.”

Overall, the Nebraska biodiesel industry supports $833 million in economic activity and close to 5,900 jobs, many of which are in rural parts of the state.

“We were thrilled to work with our member associations including the Nebraska Soybean Association, AGP and the other organizations who helped build a strong coalition advocating for this legislation while making biodiesel a priority in Nebraska,” said Jeff Earl, director of state regulatory affairs for Clean Fuels.

Nebraska joins the ranks of Illinois, Iowa and Missouri as states that have recently passed legislation supporting the sale and production of biodiesel.

These efforts will help grow the biodiesel market in the Midwest by over 300 million gallons.

*Editor’s Note: According to Jeff Earl, director of state regulatory affairs for Clean Fuels, the tax credit is applied to the purchase of the B100 gallon. The fuel retailer has the option to blend that gallon in any proportion with diesel fuel (e.g., B5, B10, B20, etc.). If they blend and sell B10, for example, they will receive 1.4 cents per gallon of B10 sold. The credit is applied to the Nebraska fuel retailers state income-tax liability. Earl told Biobased Diesel Daily® that the retailer must buy B100 and blend it themselves.