Fuel Retailers Join Energy, Transportation and Agriculture Coalition Urging Congress to Enact Short-Term Tax Package

“The biodiesel blenders’ tax credit is a key policy that helps keep diesel prices down and reduces carbon emissions,” said Doug Kantor, NACS General Counsel

NATSO, representing America’s truck stops and travel centers, SIGMA: America’s Leading Fuel Marketers, and the National Association of Convenience Stores (NACS) joined 36 organizations representing a broad spectrum of energy and transportation providers, consumers and agriculture in urging Congress to enact a short-term tax package to ensure energy and agriculture market stability until lawmakers can debate long-term tax policy in the 119^th Congress. 

American consumers face substantial rising energy and fuel prices amid significant market uncertainty stemming from the expiration of longstanding energy tax policies and a lack of regulatory guidance for new tax policies scheduled to take effect in 2025, the organizations said in a letter addressed to the U.S. House of Representatives and Senate.

A short-term energy package that incorporates several proposals to extend fuel tax credits for an array of alternative fuels, including the biodiesel blenders’ tax credit, can incentivize a technology-neutral approach to decarbonization and the nation’s energy tax structure while giving industry time to understand and adjust to new tax structures.

“Unless something is done soon, existing credits will expire without any meaningful guidance from Treasury regarding the Clean Fuel Production Credit,” said NATSO and SIGMA Executive Vice President of Government Affairs David Fialkov. “This is prompting the biodiesel industry to effectively shut down. Emissions will increase, fuel prices will increase, and agriculture jobs will be lost. We are well past the point where guidance can quickly fix this dire situation. Industry needs a real solution right now. We implore Congress to enact a short-term tax package that extends the longstanding biodiesel blenders’ tax credit to serve as a bridge until longer-term tax policy is front and center for the new Administration and Congress.”

“The biodiesel blenders’ tax credit is a key policy that helps keep diesel prices down and reduces carbon emissions,” said Doug Kantor, NACS General Counsel. “We should not sacrifice those goals simply because guidance on a new tax credit is not ready. It’s time for an extension that will allow for an orderly transition to a new tax policy next year and avoid chaos at the end of this year.”

In 2025, federal lawmakers will confront major tax policy expirations, the majority of which stem from the 2022 Inflation Reduction Act. Until federal policymakers and tax-writers consider broad, holistic reforms and extensions in the tax system, the combination will create severe economic headwinds for businesses and consumers. Absent Congressional action and the certainty provided by a bridge package, American consumers would face rising energy and fuel prices, and fuel retailers would face regulatory, legal, and tax filing uncertainty.

Lawmakers in both parties have proposed numerous pieces of legislation that would positively impact the scheduled transition and prevent unnecessary disruption in the fuel and energy markets. Bipartisan legislation H.R. 9060 introduced by Representatives Mike Carey (R-OH), Annie Kuster (D-NH) and Claudia Tenney (R-N.Y.) would extend the biodiesel blenders’ tax credit for one year. Sen. Chuck Grassley (R-Iowa) voiced support for a tax package that includes the biodiesel tax credit and 20 tax credits that “must be passed.”

The Inflation Reduction Act, which was signed into law by President Biden after passing Congress on a purely partisan basis, created a new Clean Fuel Production tax credit known as “45Z.” Despite repeated requests, the industry has not received guidance from the Biden Administration regarding what the value of that credit will be for different fuels. This uncertainty, combined with the scheduled expiration of the biodiesel blenders’ credit at the end of 2024 is hurting biodiesel producers, fuel retailers, trucking companies, and the entire soy complex.

Biodiesel and renewable diesel have historically been the most widely used biofuels in commercial trucking and remain the most viable option for reducing carbon emissions from the nation’s trucking, home heating oil, and rail industries in the near term. The biodiesel blenders’ tax credit directly lowers the cost of diesel fuel for truck drivers, which in turn reduces shipping costs and helps lower the prices consumers pay for goods transported by truck.

Extending this tax credit would ensure that motor carriers can continue to cut carbon emissions within existing fleets while also keeping fuel prices and consumer costs down. The biodiesel blenders’ tax credit has been instrumental in developing a strong renewable diesel industry in the United States, driving significant growth in production. The U.S. biodiesel and renewable diesel market expanded from approximately 100 million gallons in 2005 to around 4 billion gallons in 2023, all while contributing to lower transportation-related carbon emissions.

 

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