As of February 2026, US biofuel markets are adjusting to the first full policy shift under the 45Z clean fuel framework, where carbon performance now outweighs production volume. The release of Treasury guidelines has clarified how biodiesel credits will be calculated, but it has also exposed stark differences in plant competitiveness. For soy biodiesel producers, profitability increasingly hinges on measurable efficiency rather than historical eligibility.
Arlan Suderman, StoneX Chief Commodities Economist, has guided agricultural and biofuel markets through multiple regulatory cycles affecting soy, ethanol, and renewable fuels. His long-standing focus on policy-driven demand shocks gives him a unique perspective on how carbon scoring mechanisms translate into real-world margin pressure for biodiesel producers.
Key Themes
Carbon intensity scores now determine biodiesel credit value rather than guaranteed volume support.
Carbon intensity scores are now the primary determinant of credit value for soy biodiesel under the 45Z framework. Arlan Suderman explains that "soy biodiesel does not get a guaranteed credit anymore", emphasizing that emissions performance has replaced volume as the core policy metric. As a result, biodiesel plants with higher energy use or older technology see materially lower credits compared with efficient facilities. This shift forces producers to evaluate whether their operations can justify continued participation without upgrades.
Plant Efficiency Determines Access to High-Value Credits
Efficient soy biodiesel plants retain a pathway to credits approaching historical support levels if carbon thresholds are met. Suderman notes that "best-in-class soy biodiesel plants can still approach the one dollar per gallon credit level" when emissions scores are low and labor requirements are satisfied. Conversely, plants with weaker carbon profiles may see credits fall to "closer to 30 to 60 cents per gallon equivalent". This divergence reshapes investment decisions, making energy efficiency and carbon management prerequisites rather than optional enhancements.
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