House GOP Tax Writers Seek Industry Input on Biofuel Credits

by Chris Cioffi (Bloomberg Tax) House Republican tax writers are seeking comments from biofuel supply chain stakeholders as existing tax credits near expiration and Treasury guidance on a replacement credit remains outstanding.

Guidance on the 45Z credit enacted in the Democrats’ 2022 tax-and-climate law has not yet been released, and that’s sparked frustration for some who say it could mean a delay in climate-friendly investments. Others say it’s leading to sluggish feedstock purchases.

“As members of the Ways and Means Committee representing districts interested in domestic energy production and rural economic development, we want to better understand from stakeholders whether these biofuel tax provisions are ... READ MORE

Excerpt from Office Of Randy Feenstra (F-IA 4th): Today, U.S. Rep. Randy Feenstra (R-Hull) and several of his colleagues on the U.S. House Ways and Means Committee released a request for information from relevant stakeholders on biofuel tax policy.

Public Law 117-169, enacted in 2022, made significant modifications to biofuel tax policy without any Republican input. With unified Republican government in Washington, the House Ways and Means Committee is seeking feedback from stakeholders on how these provisions could be improved to support domestic energy production and rural economic development.

This request for information is a follow-up to the House Ways and Means Tax Team submission deadline of October 15th. The Supply Chains and Rural America Tax Teams are leading this effort to gather additional information on biofuel tax policy specifically.

“Biofuels are a major economic engine in Iowa and across the Midwest, and our tax policies should help this important industry to Rural America thrive. Although Republicans represent most of America’s rural districts and agricultural producers, the revisions in 2022 made significant changes to biofuel tax policy without any Republican input,” said Rep. Feenstra. “That’s why several of my colleagues on the House Ways and Means Committee and I are requesting information from our biofuel producers, farmers, and relevant stakeholders to improve these tax provisions to support domestic energy production and rural economic growth. For example, we need to ensure that farmers have flexibility on the agricultural practices that they implement to qualify for the clean-fuel production tax credit. I look forward to reviewing the input we receive and building upon the work of the Ways and Means Tax Teams.”

“As a reliable and sustainable energy source, biofuels are an essential part of an all-of-the-above approach to American energy abundance,” said Rep. Adrian Smith. “Unfortunately, the Biden administration’s refusal to provide timely guidance and its track record of creating unworkable and out of touch standards reflects an ignorance of the biofuels marketplace. It is clear we need more input from industry stakeholders to determine the best path forward for these tax credits and ensure our hard-working farmers and producers have the certainty they deserve.”

“I am proud to represent biofuel producers across western Minnesota, and I am proud to help lead this effort with Republican members of the Ways and Means Committee,” said Rep. Michelle Fischbach. “As a Vice Chair of the Rural America Tax Team and a member of the Supply Chains Tax Team, I know that this invitation for dialogue with stakeholders is incredibly important. When our Democrat colleagues rammed through their changes to biofuels tax credits, they left the industry with disappointing timelines and unworkable regulations. Our rural communities deserve a meaningful seat at the table when Congress makes discussions that directly impact them. This Request For Information will help give them a voice.”

“Once again, the Democrat elites have ignored the American people. When they wrote the 45Z tax credit to incentivize biofuel production, farmers and other stakeholders were left out of the conversation. For the past six months, the Supply Chains Tax team has met with real Americans whose businesses and lives are impacted by energy tax credits, and our goal is to ensure they have every resource available to produce American energy,” said Rep. Carol Miller. “I am happy to continue Ways and Means Republican efforts to work with stakeholders to better understand the real-world impacts of these tax credits.”

“Illinois 16th Congressional District is one of the largest corn and soybean producing districts in the nation, making biofuels a critical industry for our farmers,” said Rep. Darin LaHood. “We must continue to support biofuels as part of our solution to restoring America’s energy independence. I am proud to work with several of my Ways and Means Republican colleagues on this RFI so that we can continue to gather information as we consider reforms to our tax code next year. I look forward to hearing from our farmers and biofuels stakeholders on how tax policy can promote growth for this emerging industry and our rural communities.”

“Ways and Means Republicans are soliciting input from key stakeholders across various sectors of our economy on how to support our nation’s emerging biofuel and clean fuel production industry. Continuing to bolster domestic energy production and rural economic development is at the forefront of our America First agenda,” said Rep. Claudia Tenney. “We are dedicated to unleashing domestic energy dominance to lower costs for families, farmers, and businesses, and create American jobs.”

Excerpt from Radio Iowa: “From my point of view, not necessarily to my satisfaction, it’s unlikely that congress will pass any sort of tax bill this year,” Grassley said this week.

However, early next year Republicans in congress are hoping to extend a package of tax cuts approved in 2017 and Grassley said it’s possible the biodiesel production tax credit could be inserted in that bill. “That’s not something I can promise,” Grassley said, “but it’s obviously something I would work for.”

Iowa is the largest U.S. producer of biodiesel. The state’s nine biodiesel plants produced about 350 million gallons of the soybean-based fuel last year. The biodiesel tax credit was established in 2005 and has been extended several times.

Grassley said the U.S. Treasury Department and Environmental Protection Agency rulings on the scope of other tax breaks for renewable fuels should have been made long ago.

“This administration hasn’t done enough to offer certainty for biodiesel producers,” Grassley said. “…Right now, it would be ideal if we could at least extend the blenders credit for biodiesel. That would help some. It would also help is we could pass the Ernst-Grassley-Klobuchar bill that would have E-15 year-round, nationwide as well.” READ MORE