The Biodiesel Blenders’ Tax Credit (BTC) expired at the end of 2024 and has been replaced by a new and complex tax credit known as the “Section 45Z” Credit for biofuel producers. The expiration of the BTC has resulted in a dramatic decline in advanced biofuel production and substantially disrupted diesel markets. Meanwhile, the 45Z Credit — a substantially lower incentive which was enacted as part of the Inflation Reduction Act — has yet to be fully implemented by the Treasury Department and will allow producers to retain the value of the credit without passing it down to consumers. 

Changes to the 45Z Credit adopted in the House of Representatives as part of the budget reconciliation bill would only worsen inflationary pressures on diesel fuel prices. NATSO is asking you to contact your representatives in Washington and urge them to restore stability to biofuel markets by extending the Biodiesel Tax Credit as soon as possible, and to avoid enacting a costly modification of the 45Z Credit that won’t lower prices for consumers. 

Please ask your senators to extend the BTC as part of any legislative package that is considered in the coming months, and avoid exacerbating the volatility in diesel markets by adopting the changes to the 45Z Credit that were advanced in the House.