Biodiesel blends eligible for tax exemption in Illinois increase from 14% to 17%

A bipartisan state bill passed in Illinois in 2022 to promote the use of higher biodiesel blends is making a significant impact once again in 2025.

The legislation, known as the B20 bill, has raised the bar on biodiesel use by increasing the minimum biodiesel-blend level eligible for tax exemption.

Effective April 1, the minimum biodiesel-blend rate eligible for state tax exemption increases from 14 percent (B14) to B17, marking another step toward advancing cleaner fuel options.

This means 17 percent of every gallon of biodiesel sold in Illinois between Apr. 1 and Nov. 30 will be derived largely from domestically produced, renewable vegetable oil, with soybeans being the top contributor by far.

In 2026, the minimum biodiesel blend levels eligible for a tax exemption jump to 20 percent.

The impact of increased biodiesel adoption in Illinois has already been significant.

After the first phase of implementation, 97 percent of diesel gallons across the state contained at least 11 percent biodiesel, with half of all gallons exceeding 14 percent.

Illinois Soybean Association Chairman Ron Kindred is proud to see the continuation of efforts that support his state’s farmers.

“Increasing biodiesel-blend rates is a win for farmers, consumers and the environment,” Kindred said.

“Every step forward strengthens our energy security, drives demand for homegrown feedstocks and supports rural economies,” he said.

ISA extended its thanks to the key leaders behind the B20 bill, including primary sponsors Rep. Eva Dina Delgado, D-Chicago, and Sen. Patrick Joyce, D-Kankakee, co-chairs of the Illinois Sustainable Fuels Caucus.

ISA said it also appreciates the support of the bill’s lead Republican sponsor Rep. Charlie Meier, R-Okawville, and Gov. J.B. Pritzker for signing the bill into law.

Biodiesel is a cleaner-burning alternative to traditional diesel, significantly improving air quality and mitigating the impact of transportation-related greenhouse gases.

For information about B20 use in Illinois, visit https://www.ilsoy.org/b20-club/ to learn more about the B20 Club, a partnership between ISA and the American Lung Association that recognizes Illinois-based organizations that fuel their fleets with biodiesel blends of 20 percent or greater.