Biodiesel Tax Credit Study Shows Consumer Benefits Outweigh Current Policy
Event summary
- A study commissioned by NATSO, SIGMA, and NACS found that the Section '40A' Biodiesel Blenders' Tax Credit delivered 50-70% of its value to blenders and consumers, compared to just 20-40% under the current Section '45Z' Clean Fuel Production Credit.
- The '40A' credit expired at the end of 2024 and was replaced by the more complex '45Z' credit in 2025.
- NATSO, SIGMA, and NACS represent 90% of fuel sold at retail in the U.S.
- The study was conducted by GlobalData, a leading energy research and analytics firm.
The big picture
The study highlights a strategic anomaly in biofuel tax policies, where the simpler, more transparent '40A' credit proved more effective in delivering value to consumers compared to the complex '45Z' credit. This shift in policy has significant implications for fuel price stability and the adoption of renewable fuels, particularly in the context of current market volatility and geopolitical risks. The findings underscore the need for policies that incentivize fuel retailers to pass savings on to consumers, a critical factor in maintaining stable fuel supply options.
What we're watching
- Policy Reversal
- Whether Congress will reinstate the '40A' Biodiesel Blenders' Tax Credit to stabilize diesel prices and strengthen demand for renewable fuels.
- Market Impact
- How the current '45Z' credit structure will affect fuel retailers' ability to pass savings to consumers.
- Industry Advocacy
- The pace at which NATSO, SIGMA, and NACS can influence legislative changes to support more consumer-friendly biofuel policies.