What is the biodiesel tax credit (BTC)?

Among these provisions was the reinstatement of a $1.00 per gallon biodiesel mixture credit, commonly referred to as the biodiesel tax credit (BTC). The BTC applies to both biodiesel and renewable diesel (referred to as biomass-based diesel) through 2022. The credit was also retroactively applied to 2018 and 2019.

Can I claim biodiesel on my taxes?

If the biodiesel was sold at retail, only the person that sold the fuel and placed it into the tank of the vehicle is eligible for the tax credit. The incentive is allowed as a credit against the taxpayer’s income tax liability.

What is the tax incentive for a biodiesel Blender?

A biodiesel blender that is registered with the Internal Revenue Service (IRS) may be eligible for a tax incentive in the amount of $1.00 per gallon of pure biodiesel, agri-biodiesel, or renewable diesel blended with petroleum diesel to produce a mixture containing at least 0.1% diesel fuel.

How will the tax credit impact biomass-based diesel production?

In its January 2020 Short-Term Energy Outlook, EIA expects that the tax credit will contribute to increased levels of both domestic production and net imports of biomass-based diesel through 2021. EIA expects domestic biodiesel production will increase from 119,000 b/d in 2019 to 135,000 b/d in 2020 and 158,000 b/d in 2021.

What is the biodiesel tax incentive?

When first passed, the incentive provided a full dollar for biodiesel made from virgin oils or animal fats, and only half that for biodiesel made from recycled feedstocks such as used cooking oil. This was modified a few years after its passage.

Does the volumetric ethanol excise tax credit cover biodiesel?

While this credit did not extend to those who bought biodiesel and blended it, the Volumetric Ethanol Excise Tax Credit, active from 2004 to 2011, gave tax credits for blending ethanol in gasoline. The U.S. federal government has several tax credits available for the production and blending of biofuels.

Why is there no tax break for biodiesel?

The nearly two-year absence of the credit – the longest period the biodiesel industry has gone without the tax break – was due in part to partisan politics in Congress amid divergent energy policy priorities of the Democratic House and Republican Senate.