Michigan Producers Bullish on Biodiesel

Karen Potratz
2 hours ago
4 min read

Ritter, vice president and co-owner, Thumb BioEnergy. (Photo: Michigan Advanced Biofuels Coalition)

Policy changes and new demand opportunities create optimism in the Great Lakes state.

After months of uncertainty, Michigan’s biodiesel industry is reporting a positive outlook for 2026, thanks to updated policies and new market opportunities.

“We see many reasons to be optimistic going into 2026, as conditions have become more favorable for producing and using biodiesel,” says Hanna Campbell, market-development director for the Michigan Soybean Committee and managing director for the Michigan Advanced Biofuels Coalition (MiABC).

The W2Fuel biodiesel facility in Adrian, Michigan. (Photo: Michigan Advanced Biofuels Coalition)

W2Fuel LLC, a biodiesel producer in Adrian, Michigan, resumed biodiesel production in September after pausing production at the beginning of 2025. The company is now ramping up in hopes of reaching its full 15-million-gallon capacity by January 2026.

A few hours northeast in Sandusky, Michigan, biodiesel producer Thumb BioEnergy also looks to rebuild production after scaling back earlier this year. At full capacity, Thumb BioEnergy can produce an estimated 1 million gallons of biodiesel. Used cooking oil (UCO) collected by the company’s B20-powered collection fleet serves as the feedstock.

Scaled Back Production in 2025

Several policy changes affected these biodiesel producers, starting at the end of 2024 when the biodiesel blenders tax credit (BTC) expired.

“The $1-per-gallon blenders tax credit had been in place for the past 10 to 15 years,” says Roy Strom, president and CEO of W2Fuel. “It was critical to maintaining positive margins for W2 Fuel. Without the blenders credit, we watched our revenue drop by an estimated 70 cents per gallon. It cost more to produce biodiesel than we could get in return.”

The BTC was replaced with the 45Z clean fuel production credit (PTC), but the value of that credit requires calculations under rules that had not been finalized for much of 2025.

Positive Market Impacts

W2Fuel and Thumb BioEnergy now have a brighter outlook, thanks to new federal policies. These include proposed higher renewable fuel use requirements under the federal Renewable Fuel Standard, new legislation to extend the PTC and a reinstated agri-biodiesel producer tax credit.

“We remain optimistic as these policies are clarified and can begin to offer more stability to the industry,” says Alex Ritter, vice president and co-owner of Thumb BioEnergy.

Strom adds, “For now, we’re bullish on biodiesel. Policies are pointing in the right direction, and I expect our markets to come back.”

New Demand Opportunities

Meanwhile, demand opportunities are opening. For example, earlier this year John Deere announced approval of B30 biodiesel blends in all its Tier 4 John Deere Power Systems engines for farm and construction equipment—a 10 percent increase over the previously approved B20 blend.

Other manufacturers and organizations support biodiesel as well. For example, Volvo, a manufacturer in the heavy-truck sector, approves the use of B100 in several truck models, and ADM uses B100 in Mack trucks equipped with the proprietary Vector System from Optimus Technologies.

Growing interest in the marine sector also bolsters local demand in a state surrounded by the Great Lakes. The Detroit/Wayne County Port Authority (Port Detroit) recently completed its second round of carbon-emissions reporting as part of its Decarbonization and Air Quality Improvement Plan. The decarbonization plan aims to reduce greenhouse-gas emissions from port activity to net zero by 2040.

“Biodiesel is a key component of our action plan to reach net-zero emissions,” says Mark Schrupp, executive director of Port Detroit. “That includes use of biodiesel to fuel trucks that support the port, as well as in large shipping vessels that transport goods on the Great Lakes.”

MiABC Continues Biofuel Support

The work of MiABC is another positive force in the Michigan biodiesel industry. Founded in 2022 by MSC and the Michigan Soybean Association, MiABC works to increase understanding and adoption of biodiesel and other advanced biofuels produced from renewable resources such as soybean oil.

MiABC supports the biofuels industry through education, technical expertise, networking and promotion. Fuel experts available from MiABC help answer questions and guide the transition to biodiesel. They also collect and report data to quantify the health and environmental benefits of advanced biofuels.

Stakeholders in MiABC include fleets, advanced biofuel producers, feedstock suppliers, fuel distributors, fuel equipment and technology providers, as well as nonprofit organizations and individuals with an interest in improving air quality and reducing carbon emissions in Michigan.

The ups and downs of the biofuels market make the mission of MiABC even more important, according to Campbell.

“Although we’re feeling optimistic about opportunities for biodiesel in Michigan as we head into 2026, we will continue to invest in efforts to support biodiesel adoption,” she says. “We provide training and educational resources for users and potential users of biodiesel, renewable diesel and sustainable aviation fuel.”

For more information about MiABC, visit miadvancedbiofuels.com.