Biodiesel: “A Great American Success Story”

Biodiesel has had a transformative impact on our economy—renewing tax incentives could keep the momentum going.

On February 11, House leaders sent a letter to Congress calling for a multi-year extension of biodiesel and renewable diesel tax incentives. In their letter, legislators from both sides of the aisle cited the fuel’s success in reducing toxic emissions as well as US dependence on foreign oil, calling biodiesel a “great American success story.”

So, how exactly has the environment—not to mention the economy—benefitted from widespread embrace of biodiesel? And what’s at stake as lawmakers weigh policy surrounding renewable fuels?

The Benefits of Biodiesel

When we think about the benefits of renewable fuels like biodiesel, we tend to first think about its environmental impact. But biodiesel’s greatest success has been its impact on the US economy—particularly in the transportation and agriculture industries. According to the February 11th letter to Congress, “US biofuel production supports more than 60,000 good paying jobs in the US and helps rural communities across the country build new economic opportunities.”

For farmers, especially Iowa’s soybean farmers who are feeling the impact of falling crop prices and trade uncertainties, biodiesel production offers a glimmer of hope—in the letter to congress, lawmakers said biofuel “can add roughly 63 cents of value to every bushel of soybeans.”

For the transportation industry, switching fleets to biodiesel or biodiesel blends comes with its own financial benefits. As online commerce continues to push fleets to their limits, fuel prices are becoming an increasing concern for drivers and carriers. Extending the biodiesel tax incentives would help lower the cost of fuel, passing the savings off onto drivers, and in turn, lowering the cost of goods they’re hauling for consumers.

Is a Biodiesel Tax Incentives Extension on the Horizon?

On March 1, Iowa Senator Chuck Grassley and Oregon Senator Ron Wyden, inspired by the February 11 letter to Congress, introduced legislation calling for the renewal on several expiring tax incentives for biodiesel, including:

  • Credits for installing alternative fuel (including biodiesel) vehicle refueling stations (must be up and running by 2020). The maximum credit is $30,000/location for stations installed on a business property.
  • The $1/gallon biodiesel mixture credit.
  • The 10¢/gallon small agri-biodiesel producer credit.


Acterra is closely monitoring the story–Contact us for updates and developments on this and other biodiesel news.