A bipartisan effort in Congress to extend a key biodiesel incentive is drawing support from fuel retailers, who say the policy helps lower costs, stabilize supply and strengthen demand for soybean-based fuels.
The proposed “Biodiesel Tax Credit Extension Act of 2026” would extend the $1-per-gallon biodiesel blenders’ tax credit through 2029. The legislation would also allow taxpayers to choose between the biodiesel credit and the federal 45Z clean fuel production credit.
Industry groups are urging Congress to act quickly, calling the credit a proven tool to reduce fuel costs and support domestic energy production.
Andy Richard, CEO of Sapp Brothers and a NATSO board member, said biodiesel plays a direct role in connecting Nebraska agriculture to the fuel market.
“Biodiesel is typically made with soybean oil, which is great for Nebraska farmers, great for the Nebraska consumer,” Richard said. “It’s a really fantastic product.”
Randy Gard of Nebraska-based Bosselman Enterprises also backs the biodiesel credits, saying it’s important for Nebraska biofuels. Gard also serves in a leadership role with NATSO, representing America’s travel centers and truck stops.
Biodiesel is commonly blended with petroleum diesel at levels ranging from about 5% to 20%, depending on conditions. Richard said the fuel can help reduce reliance on traditional petroleum sources while utilizing existing infrastructure.
“It’s a drop-in fuel,” said Richard of Sapp Bros. “You can literally take all the existing infrastructure and use biodiesel, and the trucks can go up and down the road.”
Economic reality drives blending decisions
Richard said the tax credit is critical to making biodiesel blending financially viable for retailers and fuel suppliers.
“The economics are such right now that it doesn’t make sense to blend the biodiesel into the diesel,” he said. “So the (biodiesel tax credit) definitely helps retailers and wholesalers make economic sense, which then they pass on that savings to the consumer.”
According to a recent analysis cited by industry groups, between 50% and 70% of the credit’s value has historically been passed through the supply chain, benefiting both consumers and farmers.
Richard pointed to what happened after the credit expired in 2024 as evidence of its impact.
“There was a steep, steep decline in blending biodiesel at the end of 2024 because it didn’t make economic sense,” he said.
Fuel retailers say that dynamic affects not just prices at the pump, but also broader supply stability—particularly at a time of global uncertainty in oil markets.
Support for agriculture and domestic energy
Supporters of the extension argue the credit is as much an agricultural policy as an energy policy, especially in states like Nebraska where soybean production feeds into biodiesel manufacturing.
“It’s all American-made product,” Richard said. “In Nebraska, the state actually makes a lot of biodiesel. It’s a great way to support the local farmer and the local economy.”
The credit can also influence planting decisions by strengthening demand for soybeans, he added.
“It gives farmers more reason to plant soybeans and continue the process,” Richard said.
Industry groups say the policy also helps reduce costs for trucking fleets, which ultimately impacts the price of goods moved across the country.
Call for congressional action
The legislation is backed by a bipartisan group of lawmakers and is being promoted as a near-term step Congress can take to address fuel costs.
Fuel retailers and industry organizations argue that policy certainty is key for long-term planning and investment.
“For us and for the consumer, having a good long-term policy in place definitely helps us run our business,” Richard said.
Supporters say extending the biodiesel tax credit would provide that certainty while reinforcing a domestic fuel supply chain tied closely to U.S. agriculture.
Congress has not yet acted on the proposal.
