Fuel retailers applaud House legislation to extend biodiesel tax credit

NATSO, representing America’s travel centers and truck stops, SIGMA: America’s Leading Fuel Marketers, and the National Association of Convenience Stores commended a group of lawmakers for introducing the “Biodiesel Tax Credit Extension Act of 2025,” which would extend the $1-per-gallon biodiesel blenders tax credit (40A).

The “Biodiesel Tax Credit Extension Act of 2025” would extend the blenders tax credit (BTC) for two years at the blender level.

Taxpayers would be able to choose between claiming the BTC or the 45Z clean fuel production credit.

Extending the BTC would immediately incentivize fuel retailers nationwide to buy and blend more gallons of biodiesel at a time when American access to low-cost biofuels is rapidly decreasing, NATSO stated.

Total renewable diesel and biodiesel volumes have declined by 58.8 percent since the BTC expired at the end of 2024.  

“This legislation comes at a critical juncture, as diminishing renewable diesel and biodiesel volumes are intensifying industry concerns about the ability to meet customer demand,” said David Fialkov, the executive vice president of government affairs for NATSO and SIGMA. “Not only would this legislation inject much-needed certainty into biofuel markets, but it is easy to understand and to implement. For too long, too many people have been pursuing extraordinarily complicated policy solutions. It has only served to exacerbate uncertainty and market challenges. Simplicity is important.”

Fialkov commended Rep. Mike Carey, R-Ohio, and all the lawmakers cosponsoring this legislation “for recognizing the critical role that renewable diesel and biodiesel play in ensuring stable fuel supplies and lowering fuel costs for consumers” by supporting an extension of the BTC.

In addition to Carey, the legislation is cosponsored by Reps. Andrew Garbarino, R-New York; Dusty Johnson, R-South Dakota; Mike Kelly, R-Pennsylvania; Darin LaHood, R-Illinois; Claudia Tenney, R-New York; and Mariannette Miller-Meeks, R-Iowa.

“We urge Congress to extend this successful policy as soon as possible,” he said.

First passed in 2004 and enacted in 2005, the BTC has effectively spurred fuel retailers to invest in the necessary infrastructure to sell low-carbon alternative fuels while encouraging consumers to buy renewable fuel blends due to their lower cost.

The BTC helps create jobs, reduce the transportation sector’s greenhouse-gas emissions and enables fuel retailers to offer more competitively priced diesel fuel, NATSO noted.

The expiration of the BTC at the end of 2024 and market uncertainty created by the new and complex 45Z clean fuel production tax credit have decimated biofuels supply chains, NATSO added.

Many biofuel production facilities, particularly biodiesel plants, have scaled back or are shutting down entirely.

The fuel retailer groups pointed out that the BTC worked successfully to build a robust renewable diesel industry in the United States while decreasing carbon emissions associated with transportation fuel.

The U.S. biodiesel and renewable diesel market had grown to approximately 4 billion gallons in 2023 from roughly 100 million gallons in 2005 before dropping precipitously in the first quarter of 2025.

Extending the BTC will quickly mitigate biofuel supply concerns while also alleviating inflationary pressures on goods transported by truck, the organizations said.

“NACS appreciates the leadership of Rep.  Carey and the congressional thought leaders who supported renewal of the biodiesel blenders credit, which is critical to securing a viable future for the advanced renewable fuels market,” said Matt Durand, NACS deputy general counsel. “This legislation reflects a proven policy for bolstering domestic production and reducing consumer costs, and we urge its prompt enactment by Congress.”

A diverse group of stakeholders, including trucking fleets, shipping customers and suppliers of home-heating oil support this policy because it lowers the price consumers pay to fuel their vehicles and heat their homes.

Historically, biodiesel has been the most widely consumed biofuel for use in commercial trucking, according to NATSO, and it represents the best opportunity to reduce carbon emissions from the nation’s commercial-trucking fleet for the foreseeable future.  

The BTC lowers the price that truck drivers pay for diesel fuel, which in turn lowers the cost of shipping and therefore the price consumers pay for products that are moved by truck.

Extending the BTC will safeguard the ability of motor carriers to reduce carbon emissions in the nation’s existing commercial fleets while lowering fuel prices and the cost of goods for consumers.