The Iowa Biodiesel Board has welcomed the passage of the “One Big Beautiful Bill Act,” calling it a major step forward for the state’s biodiesel producers who have faced months of uncertainty over federal tax policies. The legislation, recently passed by the U.S. Senate, includes several key measures that directly benefit the biodiesel industry, including the extension of the 45Z clean fuel tax credit through 2029, the continuation of a transferability mechanism, and the revival of the Small Agri-Biodiesel Producer Credit, reports Iowa.biodiesel.org.
Grant Kimberley, executive director of the Iowa Biodiesel Board, said the updates to the biomass-based diesel tax credit come at a critical time for producers in the state and across the country. “These improvements come at a pivotal moment for the industry, which has seen months of uncertainty, stalled production and investment hesitation,” Kimberley said.
He added that the tax changes, when combined with the EPA’s recent proposal to increase Renewable Fuel Standard volumes, could spark a major rebound in the market. The EPA proposal forecasts an additional 2 billion gallons of biomass-based diesel by 2026.
Kimberley gave special credit to Senator Chuck Grassley (R-IA) for championing the revival and expansion of the Small Agri-Biodiesel Producer Credit, now extended through 2026 and increased to 20 cents per gallon. He said the provision is especially helpful to smaller, independent biodiesel producers in Iowa who often face financial disadvantages in the broader energy market.
The bill’s continuation of the transferability option for the 45Z credit is also seen as a key win for the industry. Kimberley said this allows producers—particularly those without large tax liabilities—to benefit from the incentive by transferring credits to other parties. “This provision is vital for biodiesel producers, especially smaller ones,” he noted.
Another positive development, according to the Board, is the bill’s focus on domestic production and the use of North American feedstocks. Kimberley said this will help American soybean farmers compete fairly while still allowing for feedstock imports when necessary to meet national production goals.
The Iowa Biodiesel Board also thanked both Senator Grassley and Senator Joni Ernst (R-IA) for their continued support, crediting their work for reaffirming the role of biodiesel in strengthening U.S. manufacturing, energy security, and rural economies.
With the Senate having approved the bill, attention now turns to the U.S. House of Representatives, which is expected to vote on the legislation soon. The biodiesel industry is hopeful the House will follow suit and pass the bill, allowing producers to move forward with greater certainty and renewed confidence.
