Biodiesel industry groups have applauded the Senate Finance Committee’s recent enhancements to the Clean Fuels Production Credit (Section 45Z). The coalition—comprising Sustainable Advanced Biofuel Refiners (SABR); NATSO, the association for travel centers and truck stops; the American Trucking Associations; Illinois Soybean Growers; the National Energy & Fuels Institute; SIGMA: America’s Leading Fuel Marketers; and the National Association of Convenience Stores—commended lawmakers for three key changes.
First, the committee’s decision to align the credit value for over-the-road biomass-based diesel with that for sustainable aviation fuel marks a crucial adjustment. By offering parity, the policy aims to prevent SAF from cannibalizing diesel-blend volumes and ensure fair treatment across renewable fuel sectors.
Second, extending the credit’s transferability to all seven program years will open this benefit to the vast majority of biodiesel producers—many of whom lack the tax appetite to claim the credit themselves.
Third, stakeholders were relieved to see the Senate maintain the removal of the indirect land-use change (ILUC) penalty. After two decades of projections, none of the modeled ILUC harms have materialized, and industry scientists agree the adjustment reflects current evidence.
Industry leaders expressed deep gratitude to Senate Finance Committee Chairman Mike Crapo (R-Idaho), Ranking Member Ron Wyden (D-Ore.), and Senator Chuck Grassley (R-Iowa) for shepherding these reforms forward.
However, the coalition warned that while the ‘45Z’ improvements make the credit far more practical, they do not take effect until 2026. With the blenders’ tax credit expired as of January and no implementing regulations in place, domestic biodiesel plants stand largely idle through 2025. Unless Congress adopts a short-term repeal or extension of the existing blenders’ credit, most U.S. biodiesel producers will face shutdown before Section 45Z can provide relief. At a time of growing instability in the Persian Gulf, they argued, “America needs every domestic drop of clean fuel it can produce.”
