Grassley, Klobuchar Lead Effort to Extend Key Tax Credit for Small Agri-Biodiesel Producers

Grassley, Klobuchar Lead Effort to Extend Key Tax Credit for Small Agri-Biodiesel Producers

BUTLER COUNTY, IOWA - U.S. Sens. Chuck Grassley (R-Iowa) and Amy Klobuchar (D-Minn.) introduced the bipartisan Small Agri-Biodiesel Producer Credit Extension Act to extend a key tax credit that supports small biodiesel producers, family farmers and the rural communities they sustain across America.

The legislation would extend the Small Agri-Biodiesel Producer Credit, which is currently scheduled to expire at the end of 2026, through the end of 2029.

"Biofuels support over 31,000 jobs across Iowa. They're good for the rural economy, good for national security and good for the environment. This credit gives small biodiesel producers the certainty they need to plan investments in rural communities and to create or maintain good paying jobs while doing their part to lower prices at the pump through increased fuel production," Grassley said.

"With the war in Iran impacting fuel prices across the country, we must continue to invest in homegrown biofuels that strengthen our energy independence, support our farmers, bolster rural economies, and lower fuel prices," Klobuchar said. "By extending this tax credit, farmers and small biodiesel producers will have the certainty they need to continue manufacturing biofuels and strengthening commodity markets."

The legislation is endorsed by Clean Fuels Alliance America and by Western Iowa Energy in Wall Lake.

"Small biodiesel producers are making an outsized contribution to America's energy security right now, providing lower-cost drop-in distillate fuel that's needed to move consumer goods across the country. They are investing in rural communities, creating and preserving jobs, and running full out to provide cleaner, better, more affordable fuel. We thank Senators Grassley and Klobuchar for proposing to extend the Small Agri-Biodiesel Producer Credit and providing policy certainty for small producers across the country," said Kurt Kovarik, Vice President of Federal Affairs at Clean Fuels Alliance America.

"The Small Agri-Biodiesel Producer Credit has been a crucial lifeline for biodiesel producers as they respond to the nation's demand for affordable, cleaner diesel fuels. Western Iowa Energy is running at full capacity to meet the Trump administration's goal of massively increasing domestic production of renewable fuel to improve America's energy security. Extension of the small producer credit will help us maintain production and local jobs in our community," said Brad Wilson, President and General Manager of Western Iowa Energy.

Click HERE for text of the legislation.

Background:

The Working Families Tax Cuts Act temporarily extended the Small Agri-Biodiesel Producer Credit to 2026. Under the credit, eligible small producers can receive a 20-cent-per-gallon tax credit on the first 15 million gallons of qualifying agri-biodiesel. To qualify, a producer must have a productive capacity of no more than 60 million gallons.

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