Carey Introduces Bill to Reinstate Biodiesel Tax Credit through 2029

April 30, 2026

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by Erin Krueger (Biomass Magazine) Rep. Mike Carey, R-Iowa, on April 27 introduced the Strengthening Economic and Energy Development Act, a bill that aims to reinstate the $1 per gallon 40A biodiesel tax credit through 2029. Taxpayers would be able to choose between claiming the 40A credit and the current 45Z clean fuel production credit.

The bill, H.R. 8497, was referred to the House Committee on Ways and Means following its introduction. To date, Reps. J. Luis Correa, D-Calif.; Mike Kelley, R-Pa.; Salud O. Carbaial, D-Calif.; Darin Lahood, R-Ill.; Jim Costa, D-Calif.; Claudia Tenney, R-N.Y.; Mariannette Miller-Meeks, R-Iowa; Dusty Johnson, R-S.D.; Ashley Hinson, R-Iowa; and Tracey Mann, R-Kan., have signed on to cosponsor the legislation. Several similar bills have been introduced since the 40A credit expired at the end of 2024.

The Section 40A biodiesel tax credit was initially created in 2004, providing fuel blenders with the opportunity to claim a credit of up to $1 per gallon of biobased diesel blended into fossil fuel. The credit was repeatedly extended, sometimes retroactively, but expired at the end of 2024 when it was replaced with the technology-neutral 45Z clean fuel production tax credit, which provides fuel producers with a production credit of up to $1 per gallon depending on the carbon intensity (CI) score of the fuel produced. Although the 45Z credit was established by law in 2022 and came into force more than a year ago, the U.S. Department of Treasury and the Internal Revenue Service have failed to issue full implementation guidance. The delay in guidance has been particularly damaging to the biodiesel industry, which experienced a sharp drop in production last year.

The SEED Act aims to reinstate the 40A credit, helping to lower prices for American consumers while boosting domestic energy production. READ MORE

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Miller-Meeks, Carey Lead Bill to Restore Biofuel Tax Credits (Office of U.S. Representatives Mariannette Miller-Meeks (R-Iowa 1st))

Excerpt from Office of U.S. Representatives Mariannette Miller-Meeks (R-Iowa 1st): Today (April 28, 2026), U.S. Representatives Mariannette Miller-Meeks (R-Iowa) and Mike Carey (R-Ohio), along with Representatives, Salud Carbajal (D-Calif.), Lou Correa (D-Calif.), Jim Costa (D-Calif.), Ashley Hinson (R-Iowa), Dusty Johnson (R-S.D.), Mike Kelly (R-Pa.), Darin LaHood (R-Ill.), Tracey Mann (R-Kan.), and Claudia Tenney (R-NY) introduced bipartisan legislation that will reinstate the $1 per gallon Biodiesel Tax Credit to support the biofuels sector and help lower diesel prices.

The “Strengthening Economic and Energy Development (SEED) Act” would extend the Section 40A biodiesel tax credit of the Internal Revenue Code through 2029, restoring a successful energy policy that promotes the production of biofuels, supports America’s long-term energy independence, and helps keep the cost of diesel low.

"With these tax credits already expired, producers are facing uncertainty at a time when they should be focused on growing and investing," said Rep. Miller-Meeks. "This legislation restores these incentives and provides the certainty our farmers and producers need. By extending these tax credits, we are supporting American agriculture, strengthening rural communities, and advancing an all-of-the-above energy strategy that keeps costs down and reduces reliance on foreign energy."

“Reinstating the Biodiesel Tax Credit allows us to tap into a policy solution that we know will serve as an economic engine by boosting domestic energy production and lowering costs for American families,” said Congressman Carey. “Strengthening our supply of biodiesel and renewable diesel will have a ripple effect across the American economy — supporting farmers who grow crops used in renewable fuels and alleviating cost pressures on fuel and consumer goods.”

The SEED Act represents a significant opportunity to lower energy prices for American consumers while boosting domestic energy production, ultimately reducing the nation’s reliance on foreign energy.

BACKGROUND:

Biodiesel and renewable diesel are advanced biofuels that are generally produced from feedstocks such as soybean oil, recycled cooking oil, or other animal fats. The U.S. Environmental Protection Agency (EPA) defines the two fuels as renewable fuels that emit at least 50 percent less lifecycle greenhouse gas emissions than fossil fuel alternatives. In many cases, biodiesel and renewable diesel reduce emissions by more than 70 percent.

In Ohio alone, biodiesel production supports over 1,500 jobs and contributes more than $806 million in economic activity. There are two biodiesel refineries in operation statewide, both of which use Ohio-grown soybeans in their production process.

The bill has earned support from the Association of American Railroads (AAR), American Trucking Associations (ATA); Energy Marketers of America (EMA); National Association of Convenience Stores (NACS); National Energy & Fuels Institute (NEFI); NATSO, Representing America’s Travel Centers and Truck Stops; SIGMA: America’s Leading Fuel Marketers, Sustainable Advanced Biofuel Refiners and Truckload Carriers Association (TCA).

Statements of Support

American Trucking Associations

“America’s supply chain depends on reliable access to affordably priced fuels,” said American Trucking Associations Chief Advocacy & Public Affairs Officer Henry Hanscom. “Lower-carbon, cost-competitive options like biodiesel and renewable diesel are an essential piece of the puzzle. ATA commends Rep. Carey for introducing legislation that will expand the availability of these proven energy sources at the pump, giving motor carriers the certainty they need to continue to deliver three-quarters of the nation’s freight.”

Energy Marketers of America

“The Energy Marketers of America strongly supports the immediate reinstatement of the $1-per-gallon Biodiesel Blenders’ Tax Credit,” said Rob Underwood, President, Energy Marketers of America. “This proven incentive has encouraged greater blending by marketers, bringing Bioheat® to the market and delivering meaningful savings to consumers on their heating bills. Additionally, the Biodiesel Blenders’ Tax Credit has helped bring renewable diesel fuel to the market, which is compatible with existing underground storage tanks and therefore reduces prices at the pump.”

NATSO, Representing Truck Stops and Travel Centers

“The SEED Act would immediately incentivize fuel retailers nationwide to buy and blend more gallons of biodiesel, helping to stabilize fuel supply options and mitigate fuel costs for consumers,” said NATSO President and CEO Max McBrayer. “We commend Representative Carey and the Members of Congress who recognize the critical role that renewable diesel and biodiesel play in ensuring stable fuel supplies while offering consumers a more affordable alternative to conventional fuel. We urge Congress to extend this successful policy as soon as possible.”

National Association of Convenience Stores

“NACS appreciates the leadership of Representative Carey and the Members of Congress supporting renewal of the Biodiesel Blenders’ Credit, which is critical to securing a viable future for advanced renewable fuels,” said NACS Deputy General Counsel Matt Durand. “With fuel prices putting continued pressure on consumers, this legislation reflects a proven approach to boosting domestic production while helping reduce costs at the pump, and Congress should act quickly to advance it.”

Sustainable Advanced Biofuel Refiners

“The Sustainable Advanced Biofuel Refiners (SABR) Coalition applauds Representative Mike Carey and other sponsors for reintroducing legislation to reinstate the Biodiesel Blender’s Tax Credit. This legislation is important because 45Z is still creating market uncertainty around GREET and ILUC. A domestic biodiesel tax credit that directly benefits American farmers, small businesses, and consumers can provide immediate supply and pricing stability to volatile energy markets. For SABR’s full statement visit www.sabrcoalition.org.

SIGMA: America’s Leading Fuel Marketers

“Well-functioning incentives like the biodiesel tax credit make it economically feasible for fuel marketers to buy and blend biofuels,” said Matt Ports, President of Ohio-based Ports Petroleum Co. and Executive Committee President for SIGMA: America’s Leading Fuel

Marketers. “When fuel marketers can access savings on fuel, we pass these cost savings on to our customers. The biodiesel tax credit has a meaningful impact on our ability to sell fuel to our customers at the lowest possible price while also providing consumer choice in fueling options. We appreciate Congressman Carey for demonstrating much needed leadership to help ensure stability and certainty within the biofuels market.”

National Energy & Fuels Institute (NEFI)

“America's heating oil dealers deliver warmth and comfort to nearly five million homes, and this past winter was a powerful reminder of how essential affordable, reliable fuel supplies are to the families they serve,” said Jim Collura, President and CEO of NEFI. “Reinstating the biodiesel and renewable diesel blenders' tax credit would deliver immediate relief at a time when geopolitical instability continues to put upward pressure on energy costs. The 40A credit is a proven tool that supports our mostly small, multigenerational family-owned businesses as they increase blends of renewable liquid heating fuels, providing a cost-effective path to lower emissions while keeping home energy affordable. We urge Congress to act swiftly on this common sense, bipartisan measure.”

Truckload Carriers Association

“Alternative fuels such as renewable diesel and biodiesel have become ingrained in the economic fabric of fleets striving to lower emissions while managing supply chain costs,” said Jim Mullen, President and CEO for the Truckload Carriers Association. “The cost-effective and dependable movement of freight hinges in large part on access to affordable and reliable fuel supplies. The Biodiesel Blenders’ Tax Credit is a critical piece of that equation. Lower costs for trucking translate to real savings for consumers on all goods moved by truck.” READ MORE