Form 8864: Biodiesel, Renewable Diesel, or Sustainable Aviation Fuels Credit
Published November 8, 2026
Form 8864 is used to claim a fuel credit for biodiesel, renewable diesel, or sustainable aviation fuel. For the 2025 tax year, the form is mainly used for one credit: the small agri-biodiesel producer credit. The instructions say that credit is still available for certain fuel.
This post is general information from the December 2025 revision of Form 8864 and its instructions. It does not say whether your business qualifies.
What changed for 2025
Most of the older fuel credits ended. The instructions say the credit periods for the section 40A biodiesel, biodiesel mixture, and renewable diesel credits, and the section 40B sustainable aviation fuels credit, expired for fuel sold or used after December 31, 2024.
The small agri-biodiesel producer credit under section 40A was extended. The instructions say it applies through December 31, 2026. Do not claim it for fuel sold or used after 2026.
The credit rate
- For fuel sold or used from January 1, 2025, through June 30, 2025, the rate is $0.10 per gallon. This is line 7.
- For fuel sold or used after June 30, 2025, but before January 1, 2027, the rate is $0.20 per gallon. This is line 8.
The instructions also set limits. Qualified agri-biodiesel production is up to 15 million gallons. The producer must be an eligible small agri-biodiesel producer, with a productive capacity of no more than 60 million gallons at all times in the tax year. For fuel sold or used after June 30, 2025, the fuel must be exclusively derived from raw material produced or grown in the United States, Mexico, or Canada.
Renewable diesel is not qualified agri-biodiesel production under these rules.
The rate changed on July 1, 2025. A producer with fuel sold on both sides of that date figures each part separately. The form does this with line 7 and line 8.
Who must file
The instructions say that partnerships, S corporations, cooperatives, estates, and trusts must file Form 8864 to claim the credit. Other taxpayers do not have to file it when their only source of the credit is one of those entities. They report the credit on Form 3800, General Business Credit, instead.
The instructions say this form covers credit from a fiscal-year partnership, S corporation, cooperative, estate, or trust whose tax year began in 2024 and ends during your 2025 tax year.
Producer registration
The instructions say all producers must be registered with the IRS to claim the small agri-biodiesel producer credit. Registration uses Form 637, Application for Registration. Check the instructions before you claim the credit.
Where the amounts go
- Line 9 adds lines 7 and 8. The instructions say this amount is included in income, even if you cannot use all of the credit because of the tax liability limit.
- Line 10 is for credit allocated to you from a pass-through entity, such as an S corporation or a partnership.
- Line 11 is reported on Form 3800, Part III, line 1l. Lines 12 and 13 apply to cooperatives, estates, and trusts.
Recapture
The instructions say you must pay a tax, called recapture, on each gallon of biodiesel or renewable diesel on which you claimed a credit if you use the fuel other than as a fuel, or separate it from a mixture. The tax is reported on Form 720, Part II, IRS No. 117, for the quarter in which the event happened.
What this post does not cover
The instructions also cover credit transfers and a pre-filing registration step for transfer elections. This post does not explain those steps. For record keeping, see How Long Should I Keep My Tax Records?.
Sources: Sources: IRS, Form 8864, Biodiesel, Renewable Diesel, or Sustainable Aviation Fuels Credit (Rev. December 2025) (https://www.irs.gov/pub/irs-pdf/f8864.pdf); Instructions for Form 8864 (Rev. December 2025) (https://www.irs.gov/pub/irs-pdf/i8864.pdf) This is general information, not advice about your specific return.
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