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Shining Light on Farm & Food Policy for 20 Years.
Sunday, March 30, 2025
Biodiesel producers could be affected the most by new small refinery exemptions pending at the Environmental Protection Agency, based on an analysis of heavy waiver action that took place under the previous Trump administration.
Despite a flurry of last-minute action from the Biden administration on biofuel policy, producers are still uncertain on how reliable those moves are under Trump 2.0.
The long awaited amendments include a 20% limit on credits for renewable diesel produced from soybean, canola and sunflower oils and authorizes CARB to stop accepting new biodiesel and renewable diesel pathways in 2031 if certain ZEV targets are met.
Across the biofuel industry, some sectors are optimistic the Biden administration's framework for the key 45Z tax credit will boost clean fuel production and support farmers. However, the proposals are not a slam-dunk, and groups are preparing to continue advocacy with the new Trump team.
USDA is making it easier for growers to qualify for a new biofuel tax credit by increasing the number of eligible crops and climate-smart farming practices and dropping a bundling requirement.
Biofuel groups are expressed increasing concern about the lack of guidance from the Treasury Department for a clean fuel tax credit that is set to take effect Jan. 1, saying investment has already slowed due to the uncertainty.
The California Air Resources Board is proposing to cap the amount of renewable diesel made from soybean or canola oil that would qualify for the state’s low carbon fuel standard.
Producers of biodiesel and renewable diesel who say federal biofuel mandates have not been enough to expand their markets sufficiently face a new challenge at the end of the year — the expiration of a $1-a-gallon tax subsidy that has helped maintain the industry for several years.
The Environmental Protection Agency says it likely won’t finalize the biofuel usage mandates for 2026 until the end of next year, which is discouraging news for a sector that blames the existing renewable volume obligations for the collapse in credit prices that has hammered many producers.
A policy-driven boom in U.S. renewable diesel demand that’s been underpinning much of the farm economy is showing signs of slowing as production exceeds the government’s usage mandates, but industry officials hope a new tax credit and a big new potential market in Canada will help put some sizzle back in the market.
