SABR applauds Senate bill to extend biodiesel blenders tax credit

The Sustainable Advanced Biofuel Refiners Coalition applauded the introduction of a bill in the U.S. Senate Dec. 2 to temporarily extend the $1-per-gallon biodiesel blenders tax credit (BTC), which expired at the end of 2024. 

S.3297 was introduced by Sen. Marsha Blackburn, R-Tennessee, and referred to the Senate finance committee.

“SABR applauds Sen. Blackburn for her leadership in introducing the BTC extension in the Senate,” said SABR CEO Joe Jobe. “If passed by Congress, this policy would provide desperately needed transitional relief to the biodiesel industry and all of the other industries that biodiesel benefits in the value chain. This includes farmers who are experiencing an economic crisis in agriculture right now.”

A combination of policy uncertainties has severely distressed the biodiesel industry throughout 2025 and has pushed it to the brink, SABR stated.

The section 40A BTC expired in December 2024 without its intended replacement—the 45Z clean fuel production credit—having been implemented, with neither proposed nor final regulations issued by the treasury department.

In addition, the 2025 renewable volume obligations (RVOs) under the Renewable Fuel Standard were set woefully low—substantially lower than 2024 production—which significantly depressed renewable identification number (RIN) credit prices.

Although U.S. EPA’s proposed RVO rule for 2026 and 2027 included a welcomed increase, the final rule is not expected to be issued until sometime in 2026.

Moreover, the 43-day government shutdown was the longest in history and further exacerbated these delays in regulatory actions.

“An extension of the 40A biodiesel tax credit now would provide necessary transitional relief to buy time to get the 45Z rules in place as well as the final RVO rule for 2026 and 2027,” Jobe said. “Biodiesel is the lowest-cost, lowest-carbon heavy-duty biofuel. Previous biodiesel investments that provide good-paying green jobs to rural and other underserved communities are now at risk. Farmers rely on a healthy biodiesel industry as an important market for their soybean oil. We have already seen an alarming rate of both farmer and biodiesel producer bankruptcies and plant closings this year. Without this temporary transitional relief, we could see lasting harm done to our domestic energy security and food supply.”