Alexandria: A coalition of major U.S. fuel and retail associations, including NATSO, SIGMA, and NACS, has voiced strong support for the newly introduced Biodiesel Tax Credit Extension Act of 2025. The bill, sponsored by Representative Mike Carey (R-Ohio) and six other bipartisan lawmakers, aims to extend the “40A” biodiesel blender’s tax credit for two more years, allowing taxpayers to choose between it and the new, more complex ’45Z’ Clean Fuel Production Credit.
Since its expiration at the end of 2024, biodiesel and renewable diesel volumes have plummeted by nearly 59%, a sharp downturn that has strained fuel supply chains and raised concerns about meeting demand, especially in the commercial transport sector. Industry leaders argue that the uncertainty introduced by the newer 45Z credit has made market conditions unpredictable and discouraged investment in renewable fuel production.
David Fialkov, Executive VP of Government Affairs for NATSO and SIGMA, called the extension “urgently needed” to restore supply stability and help fuel retailers meet demand. “This legislation comes at a critical juncture,” he said, noting the previous success of the Biodiesel Tax Credit in promoting infrastructure investment and consumer adoption.
The original credit, first enacted in 2004, has been credited with growing the U.S. biodiesel and renewable diesel market from just 100 million gallons in 2005 to 4 billion gallons by 2023. The expiration of the credit and transition to the complex 45Z system caused numerous biofuel producers to curtail operations or shut down.
The new bill is widely supported by trucking companies, fuel marketers, shipping firms, and heating oil suppliers, who argue it will lower fuel prices and reduce inflation by decreasing shipping costs. Advocates say it will also sustain progress in lowering transportation sector emissions using existing commercial diesel fleets.
Matt Durand, Deputy General Counsel at NACS, praised the bill for its clarity and effectiveness: “This legislation reflects a proven policy for bolstering domestic production and reducing consumer costs.”
Supporters urge Congress to swiftly pass the bill, arguing it is a tested and simple solution that can restore confidence in the renewable fuels market and prevent further economic disruption.
