Due to the lack of specific U.S. GAAP guidance for the following tax credits, the Company elected to follow International Accounting Standards (“IAS”) 20 principles (“Accounting for Government Grants”). Accordingly, the following credits were recognized as a reduction in the cost of goods sold, net of estimated selling expenses. In addition, the Company utilizes the deferral method for grants related to long-lived assets, whereby the grant is recognized as deferred income and amortized to Other expense, net, systematically over the asset's productive life.

SMALL AGRI-BIODIESEL PRODUCER TAX CREDIT

The Small Agri-Biodiesel Producer Tax Credit (“SPTC”) expired  December 31, 2024.

On July 4, 2025, the Budget Reconciliation Act of 2025 officially reinstated and extended the Small Producer's Tax Credit through December 31, 2026. This transferable, nonrefundable credit offers eligible producers—those with a capacity of 60 million gallons or less—$0.20 per gallon on the first 15 million gallons of fuel they produce. The benefit of this credit is recognized as a reduction in cost of goods sold following IAS 20.

The Company recognized $1,490 and $1,845 in the three and six months ended June 30, 2026, respectively.

CLEAN FUEL PRODUCTION TAX CREDIT

The Clean Fuel Production Credit (“CFPC” or “45Z credit”), established by the Inflation Reduction Act of 2022 and extended through 2029 by the Budget Reconciliation Act of 2025, is a key incentive for low-emission transportation fuels. The Company’s biodiesel was approved for the CFPC in December 2024.

This transferable, nonrefundable income tax credit uses a sliding scale based on the fuel's greenhouse gas emissions. The Company qualifies for an increased credit above the base of $0.20 per gallon for non-aviation fuel because it satisfies the prevailing wage and apprenticeship requirements.

The Company recognized CFPC of $3,724 and $2,483 for the three months ended, and $4,888 and $2,483 for the six months ended, June 30, 2025 and 2026, respectively.

TRANSFERABLE TAX CREDITS (SPTC and CFPC)

The Company finalized an agreement in June 2026 to sell all 2025 SPTC and CFPC for $2,725 net of fees. These credits were previously estimated at  December 31, 2025 at $2,654.

ASSET GRANT

In conjunction with a facility expansion project in March 2011, the Company secured federal and state grants. The resulting asset, which has a 33-year life, will have its value recognized as Other expense, net over the same period.