Iowa Renewable Fuels Association Executive Director Monte Shaw says the state’s biodiesel producers are facing dire circumstances.
Many biodiesel plants idled in 2025 and haven’t restarted, according to Shaw. “I’m told that a typical plant, just because of ongoing overhead costs, spends about $800,000 per month even when you’re not running and not buying feedstocks. They are going to run out of cash,” Shaw said. “I think we have some plants that are on the brink and it’s breaking my heart.”
The biodiesel industry is waiting for guidance on federal tax credits for low-carbon fuels that could be worth up to $1 per gallon. It’s called the Section 45Z Clean Fuel Production Credit. “These folks have credits, probably a million or two million dollars’ worth of credits, that they could claim if we could get final 45Z rules,” Shaw said.
Shaw also cited the delay in the Environmental Protection Agency’s release of mandated biofuel blending levels for 2026. “They were supposed to be out in October and they aren’t out yet,” Shaw said. “We were told they might be out by the end of February. That might be in the nick of time because once those levels are set, then people kind of know what the market is going to be and you can start having transactions.”
A national trade association for producers of biodiesel and sustainable aviation fuels is also urging the EPA to act. The Clean Fuels Alliance said the delay in releasing the 2026 Renewable Fuels Standard obligations has created “intolerable uncertainty” for biodiesel producers and soybean processors who are negotiating contracts and making investment decisions for 2026. The group also warned it’s impacting how many acres farmers may plant with soybeans this spring.
