Future of Biodiesel Tax Incentive Program

The biodiesel tax incentive program expires at the end of this calendar year. Congressional sources signal that another extension is likely, but the timeline on when that takes place is murky. Contacts are not ruling out a one- or two-year extension in a post-election, lame-duck session of Congress, while others say this issue could be bumped to a new Congress in 2017.

Looking further out, this issue could be tied with tax reform efforts, notably corporate tax reform, some sources predict. Some lawmakers may want to use the revenue involved via the biodiesel tax incentive as a budget offset via tax reform.

Efforts to move the program to a producer rather than a blender incentive continue via the National Biodiesel Board and Sen. Chuck Grassley, R-Iowa. However, that would constitute a major change for the program and as was seen in 2015, that effort failed.