RFA Shares Input with House Ways and Means on Biofuel Tax Credits

(Renewable Fuels Association) With certain modifications and proper implementation, the Clean Fuel Production Credit (“45Z”) could create important new market opportunities for farmers, lower fuel prices for consumers, enhance energy security, and reduce emissions, the Renewable Fuels Association wrote today in response to a request for information from members of the House Committee on Ways and Means.

“A successful tax credit program would result in greatly expanded production and use of U.S.-produced low-carbon biofuels; creation of new value-added markets for U.S. farm commodities; lower fuel prices for consumers; and reduced dependence on foreign energy sources,” wrote RFA President and CEO Geoff Cooper. “Success can only be achieved if the tax credit program is durable, broadly scalable, and implemented in an efficient and straightforward manner for taxpayers.”

RFA called on the committee to consider extending the existing suite of biofuel tax credits—including the second-generation biofuel producer credit—while guidance is developed for 45Z and as potential modifications are debated in 2025. In addition, a more streamlined approach for registering for 45Z and securing IRS approval would help ensure biofuel producers are immediately ready when final rules are promulgated.

RFA also called on the committee to ensure that any modifications to 45Z take a broad approach to climate-smart agriculture practices.

“A wide array of CSA practices should be included to encourage the broadest participation possible by American farmers,” Cooper wrote. “It is also essential that there are no ‘bundling’ provisions that require farmers to adopt multiple CSA practices simultaneously.”

Finally, RFA suggested changes in the 45Z program’s treatment of sustainable aviation fuel “in order to truly stimulate investment in, and expansion of, SAF production.” To sustain and promote new investment in SAF, the base value of the 45Z credit for aviation fuels must be enhanced to improve the economics of SAF production and send the right market signal to SAF financers. READ MORE

Excerpt from Growth Energy: Growth Energy, the nation’s largest biofuel trade association, responded today to a request for information (RFI) from the House Ways and Means Committee about the 45Z clean fuel production credit.

In a letter to the Committee Members who issued the RFI—Reps. Adrian Smith (R-Neb.), Randy Feenstra (R-Iowa), Michelle Fischbach (R-Minn.), Darin LaHood (R-Ill.), Carol Miller (R-W. Va.), and Claudia Tenney (R-N.Y.)—Growth Energy outlined why the organization and its members support 45Z and believe it to be critical to their continued success in a low-carbon economy.

“Our industry is supportive of 45Z because it provides our members the ability to make costly capital investments to meet carbon constraints established by U.S. subnational policy and foreign trading partners,” said Growth Energy CEO in the letter. “While we do not actively promote and seek these low-carbon regimes, we have to work within these programs…energy products in general will be required to meet a lower carbon intensity (CI) over the next several decades, and most of these investments needed to reduce CI are difficult—if not impossible—to do without something like the 45Z tax incentive.”

Growth Energy also detailed the best-case scenario for implementing 45Z and what happens to the credit once it has served its purpose.

“Success for ethanol producers under 45Z is that we utilize this credit to deploy billions of dollars of capital to make robust energy investments in rural areas to increase American energy dominance and provide farmers with a growing market for more valuable commodities,” Skor added. “Once we have seen this deployment of capital and an increase in farm markets, we would see this credit come to an orderly, well-planned phaseout as we would not require this credit in perpetuity.”

Read Growth Energy’s full response to the House Ways and Means Committee here. READ MORE

Excerpt from Ethanol Producer Magazine: ACE also called on lawmakers and federal officials to extend the 45Z credit, address guidance delays and take a broad approach to CSA. "The 45Z Clean Fuel Production Tax Credit has the potential to be transformative, incentivizing investments in cleaner technologies and sustainable practices that directly benefit America’s farmers, biofuel producers and the environment,” said Brian Jennings, ACE CEO. “ACE is committed to ensuring this policy delivers maximum value for our ethanol producer members and looks forward to remaining actively engaged in its implementation under the current administration and the next."

Within its comments, ACE called for a long-term extension of the 45Z credit and urged Treasury and the USDA to allow individual and stacked agricultural practices to qualify toward emission rates for the credit, avoiding a restrictive bundling approach. ACE also stress the importance of routinely updating eligibility criteria to reflect advancements in agricultural technologies and practices. READ MORE