Heavy Duty Trucking Logo
MenuMENU
SearchSEARCH

Expiration of Biodiesel Credit Creates Uncertainty

The biodiesel tax credit expired at the end of last week, leaving biodiesel producers and truckstops in uncertainty over what the next few months may hold, and truckers concerned about possible price increases

by Diana Britton, Managing Editor
January 5, 2010
Expiration of Biodiesel Credit Creates Uncertainty

A B20 biodiesel and E85 pump in Alabama along I-65.

3 min to read


The biodiesel tax credit expired at the end of last week, leaving biodiesel producers and truckstops in uncertainty over what the next few months may hold, and truckers concerned about possible price increases.

Ad Loading...



According to Michael Frohlich, director of federal communications at the National Biodiesel Board, there has been some talk of layoffs and shutting down among smaller biodiesel makers, but biodiesel producers have been waiting until after the holidays to announce their final plans for moving forward. These businesses are evaluating how things are going, looking at how much capital they have on hand, and seeing how long they can go on without the subsidy.

Last month, the Senate decided to table the consideration of an extension to the biodiesel tax credit until after the holidays, but some say the delay would force biodiesel producers to cease operations and lay off their workers because consumer demand for the fuel would plunge without the credit. The Senate has been tied up with other priorities, especially the health care debate. Sens. Max Baucus, D-Mont., and Charles Grassley, R-Iowa, have committed to taking up the legislation when Congress reconvenes this month. Although the timing of the legislation is unknown, Frohlich says the $1 per gallon credit will likely pass and could be made retroactive to Jan. 1.

According to NATSO, a national trade association representing travel plaza and truckstop owners and operators, truckstops will likely see a sharp drop in the availability of biodiesel and an increase in prices, until an extension is passed.

Rich Moskowitz, vice president and regulatory affairs counsel at the American Trucking Associations, says the end of the subsidy will essentially cause a direct increase in cost for the trucking industry because of the mandates to use biodiesel. Specifically, the Federal Renewable Fuels Standard requires the use of 650 million gallons of biodiesel in 2010, and without the $1 a gallon credit, this would cost the trucking industry and consumers an additional $650 million this year. In addition, some states have biodiesel requirements, such as Minnesota, which requires diesel fuel to contain 5 percent biodiesel.

However, these mandates will create some artificial demand, Moskowitz says, as some will be forced to buy it. While the 650 million gallons will certainly keep some producers afloat, there are more biodiesel producers out there than are gallons of biodiesel mandated for use, Moskowitz adds.

According to Frohlich, consumers in the states with mandates will end up eating the additional costs for biodiesel. Without the subsidy, the biodiesel industry will not see a whole lot of excess production, he says. The NBB is directing its members to contact their elected officials and tell them about the importance of the tax credit to their business.

With the added financial pressures, biodiesel producers could be cutting corners, Moskowitz says. Three years ago, the industry was having problems with the quality of biodiesel produced in the U.S., causing operational problems for trucking companies. Since then, the NBB has implemented a quality assurance program, but there are still some problems, Moskowitz says. He urges trucking companies to be vigilant in choosing a biodiesel producer during this time.

Subscribe to Our Newsletter

More Fuel Smarts

Four men in suits on the National Mall with giant video screen showing capitol building in the background
Equipmentby Deborah LockridgeJuly 10, 2026

EPA Proposal Could Ease 2027 Truck Costs and Buying Uncertainty

The proposal doesn't change the tougher NOx standard, but it would revise key implementation requirements that manufacturers say have driven up costs and complicated fleet purchasing decisions.

Read More →
Illustration showing Paccar MX engine with sketch illustration of DEF fill tank in background
Equipmentby Deborah LockridgeJuly 7, 2026

Cummins, Paccar Ease DEF Derates After EPA Guidance

Updated diesel engine software gives truck operators more time to address emissions-system issues while staying compliant with EPA emissions standards.

Read More →
Illustration with wrenches in background with "Maintenance in the Messy Middle: Biodiesel" text and NACFE Run on Less logo
Maintenanceby Jack RobertsJuly 2, 2026

Maintenance in the Messy Middle Part 3: Biodiesel

Biodiesel can reduce emissions, improve fuel-system lubricity and use existing diesel infrastructure. But NACFE’s Messy Middle maintenance report says fleets must actively manage storage, cold-weather operation, filters and oil drain intervals to avoid problems.

Read More →
Ad Loading...
thermo king heavy duty trucking
SponsoredJuly 1, 2026

Enhance Fleet Performance with High-Efficiency Auxiliary Power Units

Drive sustainable cost savings while increasing driver comfort during short- and long-haul logistics operations.

Read More →
Illustration with wrenches in background with "Maintenance in the Messy Middle: Renewable Diesel" text and NACFE Run on Less logo
Maintenanceby Jack RobertsJune 29, 2026

Maintenance in the ‘Messy Middle’ Part 2: Renewable Diesel Fuel

NACFE's latest Messy Middle Powertrain Service & Maintenance report says renewable diesel gives fleets an opportunity to reduce carbon emissions without changing trucks, fueling infrastructure or maintenance practices. But technicians still need to understand several important operational differences.

Read More →
Illustration messy middle maintenance diesel with wrenches in background
Maintenanceby Jack RobertsJune 26, 2026

The Diesel Engine Enters NACFE’s ‘Messy Middle’

NACFE’s new Messy Middle Powertrain Service & Maintenance report says keeping modern diesel engines running now depends as much on software, diagnostics and data as traditional mechanical service.

Read More →
Ad Loading...
Illustration showing DEF tank and Detroit engine
Equipmentby Deborah LockridgeJune 18, 2026

DTNA Software Update Gives Truckers More Time Before DEF Derates Take Effect

The changes reflect EPA guidance aimed at reducing downtime caused by emissions-system faults while maintaining compliance requirements.

Read More →
Illustration of exhaust aftertreatment system on an AI-inspired blue background and a green fuel pump nozzle in the foreground.
Maintenanceby Deborah LockridgeJune 15, 2026

New Agentic Predictive Maintenance Report Demonstrates How Degraded Aftertreatment Systems Waste Fuel

Questar analyzed a large mixed-class fleet and discovered it was wasting as much as $30 in fuel per vehicle, per day, because of mechanically degraded aftertreatment systems.

Read More →
Amazon electric cargo bike on New York City street
Fleet Managementby Deborah LockridgeJune 15, 2026

New York City's Microhub Project is Delivering Results

Trucking, last-mile delivery companies, and environmental advocates like what they are seeing so far with New York's microhub program.

Read More →
Ad Loading...
Red Kenworth truck pulling Paper Transport trailer
Fuel Smartsby Deborah LockridgeJune 2, 2026

Lessons Learned About Alternative Fuels: Start Small, Stay Flexible

Practical advice on adopting alternative fuels and ZEVs from HDT's 2026 Top Green Fleets, from renewable diesel and natural gas to electric trucks.

Read More →