Carey, Miller-Meeks Lead Bill to Extend Biofuel Tax Credits

May 02, 2025

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(Office of U.S. Representative Mike Carey (R-Ohio-15)) Today (May 1, 2025), U.S. Reps. Mike Carey (R-Ohio-15), a member of the House Ways and Means Committee, and Mariannette Miller-Meeks, M.D. (R-Iowa-01) introduced bipartisan legislation to extend tax incentives that strengthen the biofuels sector.

“Biodiesel is a homegrown resource that can support our long-term energy independence and support farmers, producers, and energy workers right here in Ohio,” Rep. Carey said. “With America’s energy dominance at stake, we’re working to strengthen our supply of biodiesel for years to come.”

“Iowa’s biofuels production fuels America and powers our economy,” Rep. Miller-Meeks said. “Iowa producers need market certainty to continue producing affordable, low-emissions forms of energy. I am thankful for Rep. Carey’s collaboration on this commonsense bill which will lower energy costs and emissions, and promote the production of biofuels to further President Trump’s America First agenda for energy dominance. I look forward to getting this bill to his desk.”

“To continue our progress to sharply lower emissions, the trucking industry needs more affordable, technology-neutral solutions in the immediate term, including alternative fuels like biodiesel and renewable diesel,” Henry Hanscom, American Trucking Associations Senior Vice President of Legislative Affairs, said. “ATA is grateful to Reps. Carey, Garbarino, Johnson, Kelly, LaHood, Miller-Meeks, and Tenney for their leadership on this critical issue. Reinstating the historically successful Biodiesel Tax Credit will ensure that trucking has access to low-carbon, proven energy sources and allow trucking fleets of all sizes to further reduce the environmental impacts of their current fleets. We look forward to working with Congress to send this bill to the President’s desk.”

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.

The biodiesel tax credit refers to a group of incentives included in Section 40A(g) of the Internal Revenue Code of 1986.

The Second-Generation Biofuel Producer Tax Credit provides a tax credit of up to $1.01 per gallon of qualifying advanced biofuels, such as cellulosic ethanol made from corn kernel fiber. This tax credit incentivizes investment in innovative fuel production technologies and has resulted in critical advancements in the production of domestically produced second generation biofuels.

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 American Trucking Associations (ATA), Clean Freight Coalition, Energy Marketers of America (EMA), Illinois Soy Association, National Association of Convenience Stores (NACS), National Energy & Fuels Institute (NEFI), NATSO, Representing America’s Travel Centers and Truck Stops, Renewable Fuels Association (RFA), Sustainable Advanced Biofuels Refiners (SABR), SIGMA: America’s Leading Fuel Marketers, National Tank Truck Carriers, and Truckload Carriers Association (TCA). READ MORE

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Carey, Miller-Meeks Introduce Bipartisan Bill to Extend Biofuel Tax Credits, Boost Domestic Energy and Jobs (Scioto Post)
SABR Coalition Urges Congressional Leaders to Save US Biodiesel Industry by Reinstating Blenders Tax Credit (Sustainable Advanced Biofuel Refiners (SABR) Coalition/EIN News)
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Excerpt from Scioto Post: The bill would renew and extend vital tax credits for biodiesel and second-generation biofuels. These credits are designed to promote cleaner, domestically produced energy and give market certainty to producers across the nation.

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The legislation also includes an extension of the Second-Generation Biofuel Producer Tax Credit, which offers up to $1.01 per gallon for advanced fuels like cellulosic ethanol. These credits have driven innovation in renewable fuel technology. READ MORE

Excerpt from Sustainable Advanced Biofuel Refiners (SABR) Coalition/EIN News: The Sustainable Advanced Biofuel Refiners (SABR) Coalition, a national biodiesel trade association made up of over 70 organizational members throughout the biodiesel value chain, sent a letter April 29 to congressional leaders urging them to retroactively reinstate the biodiesel blenders tax credit (BTC) from Jan. 1, 2025, through Dec. 31, 2026.

The expiration of the $1-per-gallon BTC, also known as Section 40A, and insufficient guidance on the new Section 45Z clean fuel production tax credit have effectively shut the biodiesel industry down, SABR stated in its letter.

“It is our understanding that there are parties seeking to modify or clarify the 45Z credit in the budget-reconciliation package,” the biodiesel association wrote. “We agree that Section 45Z indeed must be modified to correct its fundamental flaws, including the fact that it favors questionably sourced imported feedstocks over domestically produced agricultural feedstocks.”

The SABR Coalition stressed that even if 45Z is improved legislatively, it doesn’t resolve the main reason that the biodiesel industry is shut down, which is the lack of implementing regulations to govern the credit. In fact, this would start the clock over on getting those implementing regulations in place.

“We are almost five months into the first year in which the 45Z credit is in effect, and without sufficient guidance the results for the biodiesel industry have been disastrous,” the coalition stated, adding that there is, however, a simple solution to this policy vacuum.

“Congress can reinstate the 40A biodiesel blenders tax credit for 2025 and 2026 in order to buy time to resolve the outstanding issues related to the implementation of the 45Z credits,” the group wrote to House and Senate leaders. “Implementing regulations for Section 40A are already in place and have been for 20 years—the markets understand and rely on those regulations. Reinstatement of Section 40A would immediately turn the markets back on. This simple solution would save the biodiesel industry from its current path toward the annihilation of 20 years of public and private investment in domestic manufacturing, agriculture and fueling infrastructure, and it would save the economic and energy benefits of those investments in the country.”

Biodiesel plants across the country have shut down due to this unforgiving but correctable gap in federal policy between the BTC expiring and the implementation of 45Z regulations. Moreover, it’s not just biodiesel producers who are feeling the pain. The economic downturn in biodiesel is impacting industries—and individual Americans with families who own, manage or work for businesses in those sectors—across the entire spectrum of the value chain, from soybean farmers to glycerin buyers and everyone in between.

“We are hopeful leaders in Congress will do the right thing for this great, uniquely American energy industry,” said SABR CEO Joe Jobe. “The biodiesel sector sparked an economic revitalization in so many small towns across the Heartland over the past 20 years—it would be a tragedy of epic proportions to lose all of this because of unfortunate miscalculations in the timing of federal policy incentives.”

The letter was sent to House Speaker Mike Johnson, R-Louisiana; House Minority Leader Hakeem Jeffries, D-New York; Rep. Jason Smith, R-Missouri (ways and means committee chair); Rep. Richard Neal, D-Massachusetts (ranking member, ways and means); Senate Majority Leader John Thune, R-South Dakota; Senate Minority Leader Chuck Schumer, D-New York; Sen. Mike Crapo, R-Idaho (Senate finance committee chair); and Sen. Ron Wyden, D-Oregon (ranking member, Senate finance committee).

To read the full letter, click here.

About the SABR Coalition
SABR is a coalition of stakeholders that have invested in building out America’s first advanced biofuel—biodiesel. Biodiesel is the most cost-effective means to reduce greenhouse gas emissions from medium- and heavy-duty vehicles, providing numerous economic, environmental, performance and energy security benefits.

SABR represents every link in the biodiesel value chain from soybean farmers and processors to biodiesel producers, distributors, retailers and consumers, as well as infrastructure, product and service providers. For more information, please visit sabrcoalition.org. READ MORE