The Big Beautiful Bill: Biofuels Win Big as Clean Energy Fractures

by Jim Lane (Biofuels Digest) Senate passage sets the stage for House vote, reshaping renewable incentives along partisan and regional lines -- ... For biofuels, the bill could not have come at a more pivotal moment. With production slowed by policy uncertainty, and the sector waiting for clarity on tax credits and market signals, industry groups say the legislation provides the most significant boost in years. Among other provisions, it extends the 45Z Clean Fuel Production Tax Credit through 2029, revives the Small Agri-Biodiesel Producer Credit at 20 cents per gallon, and maintains the transferability rules that make the credits usable for producers without large tax liabilities.

“This policy comes at a critical time for American agriculture,” said Joshua Shields, senior vice president at POET, the world’s largest biofuels producer. “An extended window for 45Z gives us greater certainty to invest in new technologies and practices that are pivotal to strengthening markets for farmers and ensuring American biofuels energy dominance.”

Grant Kimberley, executive director of the Iowa Biodiesel Board, echoed that optimism. “These improvements to the biomass-based diesel tax incentive come at a pivotal moment for the industry, which has seen months of uncertainty, stalled production and investment hesitation,” Kimberley said. He credited Iowa Senators Chuck Grassley and Joni Ernst for championing the provisions. “This gives us much-needed certainty for the near future.”

But while renewable fuels secured new guarantees, other clean energy sectors saw incentives scaled back or ended outright.

Representative John Garamendi (D-CA) called it “the largest transfer of wealth from working Americans in U.S. history,” arguing that the bill “kills medical services for 16 million people” and “slashes clean energy tax credits” to fund sweeping tax reductions that disproportionately benefit wealthier households. “Not only is Trump slashing the social safety net, he’s going after our power grid too,” Garamendi said in a statement, warning of higher energy costs and potential blackouts as solar and wind incentives expire.

Biofuels, rooted in farm states and rural economies, retain deep bipartisan appeal—particularly among Republicans eager to deliver for agriculture and domestic fuel producers. By contrast, solar, wind, and electric vehicles are often associated with urban corridors, technology companies, and policies championed by Democrats in states like California and New York.

Senators Rand Paul (R-KY), Thom Tillis (R-NC), and Susan Collins (R-ME) joined all Democrats in voting no, citing concerns over the legislation’s fiscal impact and Medicaid cuts.

Critics, however, point to estimates that the legislation will increase deficits by over $3 trillion over the next decade. Among them was entrepreneur Elon Musk, who tweeted that lawmakers supporting the bill should “hang their head in shame” for advancing what he called the biggest debt increase in American history.

At the same time, the bill imposes new work requirements and eligibility checks for Medicaid and nutrition assistance programs. Nonpartisan analysts estimate nearly 16 million Americans could lose health coverage as a result. Democrats described the cuts as unprecedented, with Garamendi warning that a typical 60-year-old California couple could see their insurance costs rise by over $22,000 per year.

For renewable fuels producers, however, the legislation represents a measure of stability after years of policy volatility. The Advanced Biofuels Association offered qualified support, praising the biofuels provisions but warning that restrictions on foreign feedstocks could raise costs.

The legislation’s focus on domestic supply chains also has implications for feedstock sourcing. While many new projects producing renewable diesel and sustainable aviation fuel rely on imported waste oils—especially used cooking oil from China—the most abundant, affordable U.S. feedstocks are agricultural and forest residues. Proponents argue that prioritizing domestic materials strengthens energy security and rural economies, though some producers warn it could limit growth by narrowing the feedstock pool at a time of rising demand.

Biofuels, with their links to agriculture and domestic supply chains, emerged as a clear beneficiary. READ MORE

Excerpt from Politico Pro Energywire: The fossil fuel sector is taking a victory lap following Senate passage Tuesday of high-profile legislation that also doubled down on Republican plans to slash clean energy tax breaks.

“This historic legislation will help usher in a new era of energy dominance by unlocking opportunities for investment, opening lease sales and expanding access to oil and natural gas development,” American Petroleum Institute President Mike Sommers said in a statement after the Senate passage. “We will continue to work with policymakers to get this final package to President Trump’s desk.”

The bill was revised just before passage to remove an excise tax on wind and solar projects and ease the timeline for phasing out credits for those industries, but clean energy advocates found little to cheer about.

"Despite limited improvements, this legislation undermines the very foundation of America’s manufacturing comeback and global energy leadership. If this bill becomes law, families will face higher electric bills, factories will shut down, Americans will lose their jobs, and our electric grid will grow weaker," said Abigail Ross Hopper, president of the Solar Energy Industries Association. READ MORE

Excerpt from Politico Pro E&E News: From fiscal hawks to vulnerable centrists worried about the Senate’s steeper Medicaid cuts, a substantial cross-section of the House GOP conference would rather take the time to amend the package and send it back to the Senate.

Head GOP rebel Chip Roy of Texas said Tuesday the chances of passing a bill out of the House by that deadline are “a hell of a lot lower than they were even 48 hours ago” based on what he saw of the Senate bill.

And, for now, some are openly questioning Trump’s push to “GET IT DONE” by July 4. READ MORE