A compromise incentivizing use of higher biodiesel blends helps the Illinois economy by increasing soybean demand while supporting a cleaner-burning fuel for the environment, one of the sponsors, state Sen. Patrick Joyce, D-Essex, told FarmWeek.
A biodiesel state sales tax incentive compromise was announced in the Illinois General Assembly last week.
Joyce unveiled the outline of a biodiesel sales tax incentive compromise in the Senate Energy and Environment Committee, and House sponsor Rep. Eva-Dina Delgado (D-Chicago) shared it in the House Revenue and Finance Committee.
Both committees allowed the two sponsors to present subject matter testimony on the compromise. Representatives of the Illinois Soybean Association testified about the compromise details.
The representatives testified the current biodiesel sales tax incentive for B11 will be adjusted so the blend levels that qualify for the incentive will be increased to a final blend level of 19% by April 1, 2026. Interim blend levels will be 13% in 2024 and 16% in 2025 before reaching 19% in 2026. The announced compromise also would create a seasonal blend level of B11 in December, January, February and March.
“Illinois is the largest soybean-growing state in the U.S. Going to higher blends will increase demand for this byproduct,” Joyce said. “It’s a good source of fuel. It’s good for Illinois, and it will help the state economy.”
Delgado continued, “Some may think this is a downstate issue, but the environmental benefits of biodiesel will improve the quality of life for residents in every corner of Illinois, including my district in Chicago. I thank the coalition for all the work they have put into making this legislation a reality and look forward to seeing Sen. Patrick Joyce’s bill come over to the House.”
The negotiations, led by the Illinois Soybean Association, were hammered out over many months. In the beginning, the Illinois Fuel and Retail Association, Illinois Retail Merchants, Illinois Petroleum Council, and BNSF Railroad were ardently opposed; however, all were open to see if a compromise could be reached.
“This started a year ago and took a lot of meetings, a lot of conversations and negotiation,” Joyce said.
Under the compromise, fuel distributors will be allowed to use either biodiesel or renewable diesel to meet the minimum blending requirements. The legislation also will accept the continued practice allowing on-site blending versus retailers having to purchase pre-blended fuel.
“The sponsors indicated that final language is being put down in legislative form and will be ready for introduction in the coming days,” said Kevin Semlow, Illinois Farm Bureau director of state legislation. “Allowing testimony to be presented to the two committees now allows for quicker action in the coming weeks because the scheduled adjournment on April 8 is quickly approaching.
“Illinois Farm Bureau policy and one of IFB’s state legislative priorities this year was to see the use of soybean-based biodiesel encouraged,” he continued. “This compromise will see the demand for soybean-based biodiesel increase in the coming years.
“We are hopeful and will be working to see the final language rolled out and voted on in these final weeks of the spring session.”