The Missouri State Legislature introduced House Bill 642 on April 10, 2025, aimed at promoting the production of biodiesel fuel within the state. The bill proposes a tax credit for Missouri biodiesel producers, allowing them to claim two cents per gallon of biodiesel produced, effective for tax years beginning on or after January 1, 2023. This initiative seeks to bolster the local biodiesel industry, which is defined in the bill as any entity registered with the U.S. Environmental Protection Agency and actively producing biodiesel in Missouri.

Key provisions of the bill include a cap on the total tax credits issued per fiscal year, set at $5.5 million, which will be allocated on a first-come, first-served basis. The credits are non-transferable and refundable if they exceed the producer's state tax liability. The Missouri Department of Revenue is tasked with implementing the bill's provisions and may require documentation from producers to ensure compliance.

The introduction of House Bill 642 has sparked discussions among lawmakers and stakeholders in the energy sector. Supporters argue that the bill will stimulate economic growth by encouraging local production of renewable energy and reducing reliance on fossil fuels. Critics, however, express concerns about the potential financial impact on the state budget, given the capped amount of tax credits and the growing demand for renewable energy incentives.

The bill's implications extend beyond economic factors, as it aligns with broader environmental goals to promote sustainable energy sources. Experts suggest that if passed, House Bill 642 could position Missouri as a leader in the biodiesel market, potentially attracting further investments in renewable energy infrastructure.

As the legislative process unfolds, the future of House Bill 642 remains uncertain, with ongoing debates likely to shape its final form and impact on Missouri's biodiesel industry.