Biodiesel Production Rebounds as Trucking Industry Seeks Relief from Fuel Costs

Biodiesel production surged to 403 million gallons in April 2026, marking a sharp recovery from January’s output of 258 million gallons as the industry bounces back from earlier declines. The rebound follows the federal government’s finalization of Renewable Fuel Standard volume requirements, which has restored confidence in the sector. Trucking companies are eyeing biodiesel as a cost-saving alternative to conventional diesel, especially as fuel prices remain elevated. Biodiesel blends like B20—20% biodiesel mixed with 80% petroleum diesel—often undercut diesel prices, while regional tax exemptions and state incentives further sweeten the deal. Grant Kimberley, executive director of the Iowa Biodiesel Board, highlighted the fuel’s price stability advantages, noting that biodiesel’s domestic production keeps dollars circulating within the U.S. economy while reducing exposure to volatile global oil markets. Iowa, the nation’s top biodiesel producer, operates eight plants with a combined annual capacity of 400 million gallons.

The state has aggressively expanded infrastructure, awarding $65 million in biofuel grants to retailers to install equipment for higher biodiesel blends. Iowa now boasts 905 fueling stations offering biodiesel blends, reinforcing its role as a critical hub for the industry. Last year, Iowa’s biodiesel production plummeted nearly 25% from 2024 levels to 266 million gallons, with the number of plants shrinking from 11 to eight. The Iowa Renewable Fuels Association cited low EPA renewable fuel volume obligations and uncertainty around federal tax credits as major obstacles. To meet 2026 and 2027 volume targets, biodiesel and renewable diesel production must climb over 60% compared to 2025 levels—a challenge that has prompted producers to ramp up operations. Kimberley emphasized that Iowa’s biodiesel sector is now running at full capacity and expects to maintain elevated output.

Increased biodiesel availability will enhance fuel sourcing reliability for truck stops and convenience centers, diversifying the trucking industry’s energy supply and shielding it from price spikes driven by geopolitical tensions, weather disruptions, or market volatility. Brad Wilson, president and general manager of Western Iowa Energy, described the industry’s recovery as a hard-won turnaround. After slashing its workforce by 25% in 2025 to survive, the company is now operating in the black, a stark contrast to last year’s struggles. “We’re still digging 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.” The resurgence of biodiesel comes as the trucking sector seeks sustainable ways to mitigate soaring fuel costs, with Iowa leading the charge in production, infrastructure, and policy support.