Congress Introduces Legislation to Extend ‘40A’ Biodiesel Blenders’ Tax Credit
The bill would extend the $1 per gallon biodiesel tax credit through 2029 at the blender level.
Apr 28, 2026
This week, Rep. Mike Carey (R-Ohio) introduced the bipartisan “Biodiesel Tax Credit Extension Act of 2026,” which would extend the $1 per gallon biodiesel tax credit through 2029 at the blender level. Taxpayers would be able to choose between claiming the Biodiesel Tax Credit or the ‘45Z’ Clean Fuel Production Credit.
Extending the Biodiesel Blenders’ Tax Credit would immediately incentivize fuel retailers nationwide to buy and blend more gallons of biodiesel, helping to stabilize fuel supply options and mitigate fuel costs for consumers. Geopolitical instability in the Middle East has introduced significant uncertainty into global oil markets, placing upward pressure on fuel prices.
NACS, along with NATSO, representing America's travel centers and truck stops; and SIGMA: America’s Leading Fuel Marketers, applaud the bill and urge Congress to quickly enact the Biodiesel Extension Act of 2026.
“NACS appreciates the leadership of Representative Carey and Members of Congress in supporting renewal of the Biodiesel Blenders’ Credit, which is critical to securing a viable future for advanced renewable fuels,” said NACS Deputy General Counsel Matt Durand. “With fuel prices putting continued pressure on consumers, this legislation reflects a proven approach to boosting domestic production while helping reduce costs at the pump, and Congress should act quickly to advance it.”
The bipartisan legislation is co-sponsored by U.S. Representatives Salud Carbajal (D-Calif.), Lou Correa (D-Calif.), Jim Costa (D-Calif.), Ashley Hinson (R-Iowa), Dusty Johnson (R-S.D.), Mike Kelly (R-Pa.), Darin LaHood (R-Ill.), Tracey Mann (R-Kan.), Mariannette Miller-Meeks (R-Iowa) and Claudia Tenney (R-N.Y.).
A recent study found that the Section 40A Biodiesel Blenders’ Tax Credit delivered significantly more value across the entire biofuel supply chain than its replacement, the Section 45Z Clean Fuel Production Credit.
NACS has previously reiterated to Congress that the lapsed 40A biodiesel blenders credit, if reinstated, can work quickly and efficiently to control rising diesel prices across the supply chain, which effects the cost of virtually all consumer goods.
NACS urges Congress to enact the Biodiesel Tax Credit Extension Act of 2026 as quickly as possible and looks forward to working with lawmakers to advance policies that ensure fuel retailers can offer fuel supply options at the lowest possible price to consumers.
