Platts modifies Chicago and Houston biodiesel B100 tax credit calculation, Feb. 24 – S&P Global
Platts, part of S&P Global Commodity Insights, has modified 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with the transition under the Inflation Reduction Act wherein, effective Jan. 1, 2025, the blender’s tax credit has been replaced by the Clean Fuel Production credit.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 50kgCO2/MMBtu. The credit amount will be proportional to the level of emissions reduction achieved, up to the maximum $1 full credit.
Platts considers 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 calculates the 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 uses in B100 is 39.80 cents/gal.
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Platts modifies Chicago and Houston biodiesel B100 tax credit calculation, Feb. 24 – S&P Global, source
