Biodiesel Tax Credit Extended Through 2022

Congress has reached an agreement to extend the tax credits for biodiesel, renewable diesel, and alternative fuels for an additional five years. The tax credit of $1.00 per gallon for biodiesel and renewable diesel, and $0.50 per gallon for alternate fuels (including autogas propane), will be retroactively applied for 2018 and 2019, and extended through 2022. The agreement is part of a broader deal to extend a range of expired tax provisions which is expected to be quickly approved by the U.S. House of Representatives and Senate. 

Not extended is an interpretation of the alternative fuels credit for butane-gasoline mixtures produced by refiners, which have been disallowed since January 2018. 

The deal is good news for biodiesel producers, distributors and marketers, as well as fleet operators. Renewal of the tax credits was a centerpiece of the legislative agenda of the New England Fuel Institute (NEFI) and was supported by numerous other trade groups including the National Biodiesel Board, Advanced Biofuels Association, and Petroleum Marketers Association of America (PMAA). 

For more information about biodiesel tax credits and other extended tax provisions please contact our Tax Department at (781) 407-0300.