Biodiesel Output Rebounds as Trucking Seeks Fuel Cost Relief

A biodiesel refinery in Council Bluffs, Iowa. (IowaBiodieselBoard via Flickr)

Trucking companies can offset higher fuel prices with biodiesel as production of the biofuel rebounds after the federal government finalized its Renewable Fuel Standard volume requirements.

Grant Kimberley, executive director of the Iowa Biodiesel Board, pointed to April’s domestic production of 403 million gallons of biodiesel and renewable diesel as a sign the biofuel industry is turning around. Output for January was 258 million gallons.

“In the face of very high fuel prices we are currently experiencing, biodiesel can help alleviate the spikes. Biodiesel and blended fuels (like B20, a mix of 20% biodiesel and 80% petroleum diesel) often sell for less than conventional diesel,” Kimberley said.

He noted that biodiesel price advantages also can be coupled with regional tax exemptions, state-level incentives or wholesale fluctuations in global oil and feedstock markets.

“Iowa is home to some of the most comprehensive biodiesel incentives in the nation. … Biodiesel is a proven, high-quality, homegrown fuel that keeps dollars in the American economy, supports farm country and reduces exposure to the global forces that make petroleum prices so unpredictable,” Kimberley added.

The state has 905 fueling stations that offer biodiesel blends. Iowa has awarded some $65 million in biofuel infrastructure grants to help retailers add equipment to their stations to offer higher blends of biofuels.

Iowa biodiesel industry on the road to recovery - watch the TV news story here: https://t.co/TPA8GIK7dW — Iowa Biodiesel Board (@IowaBiodiesel) May 26, 2026

Last year, Iowa’s biodiesel production dropped nearly 25% from 2024 to 266 million gallons as the number of biodiesel plants shrunk to the current eight from 11. The state had a capacity to produce 400 million gallons yearly, the Iowa Renewable Fuels Association noted.

Low EPA renewable fuel volume obligations and uncertainty about federal tax credits were “major pain points in biodiesel production nationwide,” the association stated.

Iowa is the nation’s top biodiesel producer followed by Missouri, which has five plants, according to Energy Information Administration metrics.

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Kimberley 

“To meet the 2026 and 2027 volume levels, biodiesel and renewable diesel production will need to increase by over 60% compared to 2025 — a massive signal to domestic producers to get back up and running,” Kimberley said. “Truckers should know that Iowa biodiesel producers are running at capacity and expect to be for the foreseeable future.”

More biodiesel output will translate into greater biodiesel availability nationwide and improve reliable sourcing for truck stops and convenience centers.

“A diverse fuel supply makes the trucking industry more resilient, less vulnerable to the price spikes and supply disruptions that come with dependence on a single source, whether the cause is geopolitical tension, weather or market volatility,” Kimberley said. “Biodiesel delivers that diversification while simultaneously supporting a domestic industry that America depends on: agriculture.”

Brad Wilson, president and general manager of Western Iowa Energy, said his company had to reduce its workforce last year by 25% to survive and “hang on” to its remaining employees rather than resorting to layoffs. That decision is now paying dividends.

“We’re still trying to dig out of a hole, but we’re very happy with what’s happened,” Wilson said. “Last year, we would have killed to break even. Now we have some margins built in. It’s a great turnaround.”