Platts to modify Chicago and Houston biodiesel B100 tax credit calculation from Feb. 24

Platts, part of S&P Global Commodity Insights, will modify the federal tax credit for its biodiesel (B100) price assessment in Houston and Chicago, effective Feb. 24, 2025.

This change aligns with the transition under the Inflation Reduction Act wherein, effective Jan. 1, 2025, the blender's tax credit will be replaced by the Clean Fuel Production credit. Platts will monitor further guidance on the transition of the IRA tax credit.

The new federal tax credit provides a maximum of $1/gal for non-SAF fuels for producers meeting prevailing wage and registered apprenticeship requirements, requiring a maximum limit carbon intensity of 50 kgCO2/MMBtu. The credit amount will be proportional to the level of emissions reduction achieved, up to the maximum $1 full credit.

Platts will use California Air Resources Board's (CARB) Biodiesel Carbon Intensity of 28.51 gCO2e/MJ, from Substitute Pathways for Reporting Fuels with Unknown CI for 2024.

Platts will calculate lifecycle greenhouse gas emissions reduction percentage as a fraction, the numerator of which is the maximum carbon intensity (50 kgCO2/MMBTU) acceptable to be eligible for the credit minus the biodiesel CI of 28.51 gCO2e/MJ (or 30.08 kgCO2/MMBTU) and the denominator of which is the maximum carbon intensity. The credit will be rounded to the nearest hundredth cent.

(50 – 30.08)/50 x 100 cents/gal = 39.80 cents/gal

Therefore, the total biodiesel tax credit Platts will use in B100 is 39.80 cents/gal.

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