Ethanol Blog

Groups Tout Inflation Reduction Act's Provisions for Expanding Biofuels

Todd Neeley
By  Todd Neeley , DTN Environmental Editor
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The Inflation Reduction Act passed by the Senate on Sunday includes a number of tax incentives for biofuels. (DTN file photo)

LINCOLN, Neb. (DTN) -- The biofuels industry on Monday touted the passage of the Inflation Reduction Act -- which provides a number of renewable energy provisions -- on what is the 17th anniversary of the passage of the first Renewable Fuel Standard.

DTN's Chris Clayton reported on Sunday that the bill now headed to the U.S. House of Representatives, provides $500 million to expand the number of blender pumps and other biofuel infrastructure,…. The bill also extends the $1 per gallon biodiesel tax credit to 2024 and retroactively restarts it at the beginning of 2022.

Renewable Fuels Association President and CEO Geoff Cooper said in a statement the legislation is the most significant of its kind since the expansion of the RFS in 2007.

"We were pleased to see that the Senate's final passage of the Inflation Reduction Act preserved numerous provisions that recognize the important role renewable fuels like ethanol can play in bolstering our nation's economy and accelerating decarbonization efforts," he said.

"RFA will continue to urge the House to swiftly adopt these biofuel measures to ensure American families have greater access to lower-cost, domestically-produced renewable fuels that are good for the environment, the economy, and energy security."

The act also creates new tax credits for clean fuel production and sustainable aviation fuel as well as enhanced support for carbon capture, utilization and storage.

Brian Jennings, CEO of the American Coalition for Ethanol, said in a statement that climate-smart agriculture provisions in the bill will aid the ethanol industry's efforts to reduce its carbon footprint.

"The budget reconciliation legislation adopted by the Senate includes significant provisions recognizing the role farmers and ethanol producers can play in reducing greenhouse gas emissions," he said.

"We are particularly happy to see a nearly $20 billion investment to support climate-smart agriculture practices through the U.S. Department of Agriculture, which we would work to leverage to help farmers and ethanol producers monetize practices, such as reduced tillage and nutrient management, which reduce ethanol's carbon intensity."

Clean Fuels Alliance America Vice President of Federal Affairs Kurt Kovarik, said in a statement the new legislation builds on what the biodiesel and renewable diesel industries have already done.

"The clean fuels industry grew and increased production over the past several years, making an essential contribution to the nation's fuel supply that lowers fuel prices, supports good-paying jobs, adds value for America's farmers, and cuts carbon emissions," he said.

"Long-term certainty in tax policy helped our industry meet America's transportation needs, and we appreciate the further extension of the biodiesel and renewable diesel tax incentive. Our members are among the first to bring sustainable aviation fuel to market and we are grateful for the increased support for the industry's growth included in this legislation."

Also on Monday, Growth Energy outlined in a news release the biofuel industry's priorities for an upcoming reset of the RFS by the EPA.

As part of a consent decree agreement between Growth Energy and the EPA, the agency will be required to offer a formal proposal for 2023 volume requirements and likely the same for 2024 in the RFS by Nov. 16, 2022.

The expected rulemaking -- also known as the set rule -- will be the first volumes set beyond the RFS' statutory requirements through 2022.

The biofuels industry has called on the EPA to do the following:

-Ensure that ethanol continues to play a growing role in driving "climate progress" as Congress intended, by building on the 15 billion gallons of conventional biofuels set for 2022;

-Update EPA models to reflect the best-available science on the contributions of low-carbon ethanol to the nation's climate goals;

-Set "forward-looking requirements" for advanced and cellulosic biofuels that will spur continued innovation and growth without "favoring" one technology over another;

-Protect the integrity of the RFS by rejecting "improper exemptions" and other efforts to "cut, cap, or water down" the incentive to ensure physical biofuel gallons actually reach the market;

-Provide "certainty and predictability" to all stakeholders with timely, multi-year requirements that will drive growth.

Todd Neeley can be reached at

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