Sen. Marsha Blackburn, R-Tenn., on Dec. 2 introduced the Consumer Relief and Opportunities for Producers Act, which aims to temporarily reinstate the $1 per gallon biodiesel blenders tax credit for six months, through May 31, 2026.&nbsp;The currently expired 40A biodiesel tax credit was first established in 2004 to encourage the use of production of biobased diesel fuels via a $1 per gallon tax credit available for qualified blenders. The incentive remained in place through a series of short-term extensions through the end of 2024, when it was to be replaced with the current 45Z clean fuel production credit, which provides an incentive of up to $1 per gallon for a wide variety of clean fuels, including biodiesel and renewable diesel, based on the carbon intensity (CI) of the fuel.&nbsp;Although the 45Z credit was first established by the Inflation Reduction Act in &nbsp;2022 has been in force since Jan. 1, 2025, the U.S. Department of Treasury and Internal Revenue Service have not yet released full implementation rules for the credit. This lack of guidance has caused the biobased diesel industry to face significant market uncertainty.&nbsp;The CROP Act, or S. 3297, aims to reinstate the 40A biodiesel tax credit for six months, through May 31, 2026, at the blender level. During this time, taxpayers would be able to choose between claiming the 40A biodiesel tax credit or the 45Z clean fuel production credit.&nbsp;Following its introduction, the CROP Act was referred to the Senate Committee on Finance. To date, Sen. Thom Tillis, R-N.C., has signed on to cosponsor the bill.&nbsp;The legislation has been endorsed by the Sustainable Advanced Biofuel Refiners, NATSO, the national association representing America's travel plazas and truck stops, SIGMA: America's Leading Fuel Marketers, the National Association of Convenience Stores, and the National Energy &amp; Fuels Institute.&nbsp;The four groups on Dec. 11 issued a statement in support of the CROP Act, noting the 40A biodiesel tax credit helped the biodiesel industry grow from approximately 100 MMgy of capacity in 2005 to more than 2 billion gallons of capacity in 2024. Since the credit expired at the end of 2024, “the biodiesel industry has been on life support,” the groups said, with biodiesel consumption falling dramatically in 2025. “The CROP Act is intended to throw that sector a lifeboat as it awaits further clarification around '45Z,’” the groups said.&nbsp;Although Treasury has had more than three years to issue 45Z guidance, the agency has failed to do so. While it is uncertain what the incentive for biodiesel will be under 45Z, the groups note it will inevitability be much less than $1 per gallon, and likely do little to turn around the biodiesel industry’s ongoing decline.&nbsp;"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 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."&nbsp;

2025-12-15 - Blackburn introduces bill to temporarily reinstate biodiesel tax credit (2 publications)

Sen. Marsha Blackburn, R-Tenn., on Dec. 2 introduced the Consumer Relief and Opportunities for Producers Act, which aims to temporarily reinstate the $1 per gallon biodiesel blenders tax credit for six months, through May 31, 2026. 

Blackburn introduces bill to temporarily reinstate biodiesel tax credit

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