Fuel retailers in the United States have urged lawmakers to restore the biodiesel blending tax credit, saying recent policy changes have weakened demand for renewable fuels made from corn and soybeans and pushed fuel prices higher, Biomass Magazine reported.
In a letter to the United States Senate Committee on Agriculture, Nutrition and Forestry ahead of a hearing on boosting domestic agricultural production and consumption, three fuel industry groups warned that the shift from the Biodiesel Blenders’ Tax Credit to the ‘45Z’ Clean Fuel Production Tax Credit has slowed the use of biofuels.
The letter was sent by NATSO, which represents truck stops and travel centres, along with SIGMA: America’s Leading Fuel Marketers and the National Association of Convenience Stores.
The groups said demand for biodiesel has fallen since the expiry of the $1-per-gallon Biodiesel Blenders’ Tax Credit and its replacement with the ‘45Z’ tax credit. They argued that the earlier credit helped reduce fuel prices by encouraging retailers to mix more biodiesel with diesel.
According to the organisations, the earlier policy supported farmers, biofuel producers and consumers by boosting the use of fuels made from crops such as corn and soybeans.
The retailers noted that when Congress passed the One Big Beautiful Bill, fuel prices were relatively stable and the change to a producer-based tax credit did not appear to pose an immediate risk to consumers. However, they said the economic impact is now becoming clear as oil prices and retail fuel prices rise, adding pressure on households already facing high living costs.
Until 2025, the biodiesel blending credit helped control rising fuel prices by encouraging retailers to blend larger volumes of biodiesel. Industry groups said the policy allowed fuel sellers to offset price increases and keep pump prices lower.
They added that the credit also helped reduce fuel costs for trucking fleets that transport most consumer goods across the country, warning that the absence of the incentive could lead to higher diesel prices and increased costs across the wider economy.
The groups have called on lawmakers to take quick legislative action to restore the $1-per-gallon Biodiesel Blenders’ Tax Credit and said they are ready to work with the committee on measures that support domestic agriculture and renewable fuel production.
