NACS Urges Senate to Restore Biodiesel Blenders’ Tax Credit

NACS, along with NATSO, representing truck stops and travel centers, and SIGMA: America’s Leading Fuel Marketers, sent a letter ahead of the Senate Agriculture Committee hearing this week examining the need to increase domestic production and consumption of U.S. agricultural products. The associations reminded lawmakers that the transition away from the Biodiesel Blenders’ Tax Credit to the ‘45Z’ Clean Fuel Production Tax Credit is stifling demand for renewable fuels made from corn and soybeans, leading to higher fuel prices for consumers.

In the letter to the Senate Committee on Agriculture, Nutrition and Forestry, the associations said that the biodiesel market has dried up since the expiration of the Biodiesel Blenders’ Tax Credit and its replacement with ‘45Z.’

“Recent policy changes have left consumers and American farmers behind,” the organizations said. “We encourage the Committee, starting with today’s hearing, to work with stakeholders throughout the country to bring back the Biodiesel Blenders’ Tax Credit so that biofuels can go back to playing the role that they used to play: lowering retail fuel prices in the United States. Farmers, producers and consumers all benefit from a tax credit that incentivizes the consumption of biofuel. Biofuel policy works best when it helps the entire supply chain lower consumers’ costs at the pump.”

NACS and its cosigners said that when Congress enacted the One Big Beautiful Bill, fuel retail prices were stable. Extending a producer credit rather than a blender credit did not present clear-and-present economic downside for fuel consumers. Now, the harmful economic ramifications of transitioning from a blender credit to a producer credit are rapidly materializing in the form of increasing oil prices and a corresponding increase in retail fuel prices, harming American consumers who continue to grapple with affordability concerns.

Until 2025, the $1 per gallon Biodiesel Blenders’ Tax Credit served as a brake on accelerating fuel prices. The Biodiesel Tax Credit incentivized fuel retailers to blend higher quantities of biodiesel by providing a clear, understandable tax credit that allowed fuel retailers to mitigate price increases and sell fuel to consumers at the lowest possible price. It further helped lower fuel prices for the nation’s trucking fleets, which move the vast majority of consumer goods. Without the biodiesel tax credit in place, rapidly rising diesel prices stand to exacerbate price pressures throughout the broader economy.

NACS urges swift legislative action to restore the $1 per gallon Biodiesel Blenders’ Tax Credit.

Earlier this year, NACS expressed serious concern with the “Section 45Z” Clean Fuel Production Credit.

“The transition away from the Biodiesel Tax Credit to the ‘45Z’ production credit instituted a catastrophic decline in biofuels consumption that hurts the economy,” said NACS Deputy General Counsel Matt Durand at the time. “The Trump Administration inherited this unworkable mess. Congress can fix it by bringing back the Biodiesel Tax Credit, which has a proven track record of delivering lower prices to consumers while benefitting farmers and biofuel producers.”

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