ANKENY, IOWA (July 1, 2025) — The Iowa Biodiesel Board (IBB) has praised the passage of key tax provisions in the newly-passed “One Big Beautiful Bill Act” — a positive signal to Iowa’s biodiesel producers who have been waiting for clarification of new tax policies. The legislation includes several of the biodiesel industry’s top priorities — most notably, extending the 45Z credit through 2029, extending the key transferability mechanism, and reviving the Small Agri-Biodiesel Producer Credit — a provision championed by Senator Chuck Grassley (R-IA).
Grant Kimberley, executive director of the Iowa Biodiesel Board, issued the following statement:
“These improvements to the biomass-based diesel tax incentive come at a pivotal moment for the industry, which has seen months of uncertainty, stalled production, and investment hesitation. Together with EPA’s proposed increase in Renewable Fuel Standard volumes — projecting more than two billion additional gallons of biomass-based diesel in 2026 — the tax developments point to a significant resurgence in clean fuel demand. This gives us much-needed certainty for the near future.
“We extend special thanks to Senator Grassley for championing an extension of the Small Agri-Biodiesel Producer Credit through 2026 — and increasing it to twenty cents-per-gallon. This is an important win, particularly for independent producers like those in Iowa. It will help ensure they are not disadvantaged in the market and have policy certainty right now as Treasury works to implement Congress’ improvements to 45Z.
“The transferability provision will ensure all producers in the market can access and monetize it. This provision is vital for biodiesel producers, especially smaller ones without a large tax liability. We’re also encouraged to see domestic production and North American feedstocks appropriately prioritized. This allows American soybean farmers to compete fairly in their own market — something we’ve long fought for — without shutting out the ability to import feedstocks if necessary to meet ambitious goals.
“We thank the Senate, especially Senators Grassley and Joni Ernst (R-IA), for reaffirming biodiesel’s value to US manufacturing, energy security, and rural economies. These policy improvements will help get the industry back on track and restore some of the momentum we’ve lost.”
About the Iowa Biodiesel Board
The Iowa Biodiesel Board represents the biodiesel industry in Iowa, from the farmers who grow the feedstock, to production, through distribution to end users. Founded by the Iowa Soybean Association, IBB operates an independent organization and board. For more, visit IowaBiodiesel.org.
