Iowa Groups Urge Congress to Extend Biodiesel Blender Tax Credit

November 14, 2024 | Brock Johnston

Ankeny, Iowa – The Iowa Soybean Association (ISA) and Iowa Biodiesel Board (IBB) today urged U.S. House and Senate leaders for a one-year extension of the 40A Biodiesel and Renewable Diesel Tax Incentive, set to expire December 31, 2024. The energy tax credit has long generated economic return for U.S. soybean farmers and fuel producers, while helping to diversify the nation’s energy supply and reduce emissions.

The letter, submitted alongside the American Soybean Association, National Oilseed Processors Association, Clean Fuels Alliance America (Clean Fuels) and fellow state soybean organizations, comes as guidance and implementation of the Clean Fuel Production Credit (45Z) continues to be delayed by the Treasury Department. The new 45Z credit, which was expected to replace the blenders credit, is scheduled to become available on January 1, 2025.

“Unfortunately, more than two years after enactment, and with fewer than 60 days remaining until the changeover to this new regime, the Administration has not yet issued the crucial tax guidance that our members and industry stakeholders need to understand basic facts like the amount of the tax credit that they will receive for the fuel that they produce,” the letter states. “Due to the significant uncertainty created by this lack of guidance, American clean fuel producers and their partners in agriculture and fuel marketing are facing tremendous confusion in the marketplace. It is therefore critical that Congress provide a temporary, short-term extension of the existing 40A blenders credit to allow the necessary transition and a smooth integration of the new credit into business plans.”

“The industry is facing extreme uncertainty that threatens to undermine clean fuel production, jobs, economic opportunities for Iowa farmers and our state’s biodiesel industry,” said Grant Kimberley, ISA senior director of market development and IBB executive director. “A one-year extension of the existing policy would give the Treasury Department and our industry time to understand and access the new credit.”

Bipartisan legislation to extend the existing 40A Blender Credit for one year - the Biodiesel Tax Credit Extension Act of 2024 (HR 9060) - has already been introduced. The letter urges Congressional leaders to add the extension to the next tax legislation moved before the end of the current Congress.

ISA and IBB also joined a multi-industry letter today led by the Sustainable Advanced Biofuel Refiners (SABR) seeking an extension of the current blenders credit. SABR membership includes feedstock growers, biodiesel producers, distributors, retailers and others.

Read the full letter submitted by Clean Fuels here.

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Not funded by the soybean checkoff

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The Iowa Soybean Association (www.iasoybeans.com) is “Driven To Deliver” increased soybean demand through market development and new uses, farmer-focused research and results, timely information and know-how and policy initiatives enabling farmers and the industry to flourish. Founded in 1964 by farmers to serve farmers, ISA is governed by a board of 22 farmers to advocate on behalf of the state’s 37,000 soybean producers, including more than 15,000 ISA farmer members and industry stakeholders.

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