Retail fuel leaders urge Congress to restore simpler biodiesel incentives
Major fuel industry groups representing most U.S. fuel retailers have raised serious concerns about the Section 45Z Clean Fuel Production Credit. They say the policy has failed to support biofuels, farmers, and consumers as intended.
These groups explain that Section 45Z replaced the long-standing Biodiesel Tax Credit with a complex production-based system. While the U.S. Treasury Department worked to develop detailed guidelines, industry leaders argue that the policy remains too complicated and ineffective.
"As Americans are navigating affordability challenges, now would be a great time to reinstate a tax policy that actually lowers the price consumers pay at the pump. Although the Treasury Department has done its best to make lemonade out of lemons, '45Z' simply will not lower fuel prices," said David Fialkov, Executive Vice President of Government Affairs for NATSO and SIGMA.
"To add insult to injury, today's proposed rule will not even improve demand for biofuels, nor will it generate meaningful support for American farmers by increasing demand for corn or soybeans,” said Fialkov.
According to the groups, the new credit has not lowered fuel prices at the pump. Instead, it has weakened demand for biodiesel and ethanol, reducing benefits for corn and soybean farmers. They say this comes at a difficult time, as many Americans face higher living costs and energy uncertainty.
"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. "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."
Industry data shows that biodiesel consumption dropped sharply in 2025, falling to about 960 million gallons through October. This is down from more than 2 billion gallons during the same period in 2024. Government data also shows a major decline in Renewable Identification Numbers, which are used to track biofuel use under federal law. These declines suggest reduced support for renewable fuels.
Fuel retailers believe reinstating Biodiesel Tax Credit would be a better solution. They say the older policy was easier to understand, more transparent, and allowed savings to be passed directly to consumers. It also encouraged higher biodiesel use, supporting farmers, biofuel producers, and rural economies.
The groups are urging Congress and the Administration to act quickly. They want policies that clearly boost biofuel consumption, improve energy security, and strengthen the U.S. economy.
They say simpler and proven incentives are needed now to help farmers, protect consumers, and support a reliable and affordable fuel supply.
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