Biodiesel Blenders' Tax Credit

Last Updated: February 29, 2016

The Issue
In order to reduce U.S. dependence upon foreign sourced petroleum and achieve improvements in air quality, Congress created a $1-per-gallon biodiesel blenders’ tax credit. It is usually included in the annual tax extender’s package. This tax credit successfully encourages the blending of biodiesel and renewable diesel into the transportation and heating fuels market, thereby displacing the use of traditional petroleum products with renewable sources of energy.

NACS Position
NACS supports the biodiesel blenders’ tax credit and opposes eliminating the tax credit and replacing it with a biodiesel producers credit.

Retailer Impact
The biodiesel blenders’ tax credit is important for retailers selling biodiesel fuels and has played an important role in bringing more renewable diesel fuels into the marketplace. If this tax credit shifts from the blender to the producer, it would result in fuel retailers paying a higher price for biodiesel that inevitably would be passed down to consumers in the form of higher prices at the pump. This would lead to less biodiesel consumption in the United States and undercut the policy goals of the program.