Ethanol Blog
Biofuels, Ag Groups Call on Treasury to Complete 45Z Credit Guidance
LINCOLN, Neb. (DTN) -- A group of 25 agriculture, biofuels, airlines and other interests are pressing on the Biden administration to publish guidance on the 45Z Clean Fuels Production Credit and to complete necessary updates to the GREET model as companies across the country are investing in sustainable aviation fuel production and other biofuels that would qualify.
In a letter to U.S. Treasury Secretary Janet Yellen on Wednesday, the groups urged the agency to complete the work "as soon as possible."
"This new technology-neutral production credit represents the first time a federal tax incentive based on lifecycle greenhouse gas emissions rates has been used to incentivize the domestic production of fuels," the groups said in the letter.
"Our member companies and organizations, who constitute the nation's leading producers, feedstock providers, blenders, consumers, and retailers of low-GHG renewable fuels, are eager to utilize this new tax incentive and participate in the further decarbonization of the highway transportation, maritime, rail, aviation, and home heating sectors."
The 45Z credit is set to take effect on Jan. 1, 2025.
"Our member companies and organizations may face significant headwinds and business risk if this guidance is not published promptly," the groups said.
"Any extended delays in publication of guidance for the Sec. 45Z credit may disrupt project timelines, impede capital flows and threaten existing production and demand for low carbon renewable fuels."
The letter is signed by Clean Fuels America, Advanced Biofuels Business Council, Airlines for America, Alternative Fuels and Chemicals Coalition, American Biogas Council, American Short Line and Regional Railroads Association, American Soybean Association, Associated Equipment Distributors, Association of American Railroads, Association of Equipment Manufacturers, Cargo Airline Association, Coalition for Renewable Natural Gas, General Aviation Manufacturers Association, Growth Energy, Methanol Institute, National Air Transportation Association, National Business Aviation Association, National Corn Growers Association, National Oilseed Processors Association, North American Renderers Association, Renewable Fuel Association, SAF Coalition, U.S. Canola Association, Vertical Aviation International, and Waste Gas Capture Initiative.
"The clean fuels marketplace is a complicated ecosystem that is tied in many cases to agricultural inputs and feedstock production, sales of fuel and futures, allocations to third-party marketers and other factors that require many months of advance understanding of the new tax structure," the groups said.
Kurt Kovarik, Vice President of Federal Affairs for Clean Fuels Alliance America, said in a statement that, "U.S. biodiesel and renewable diesel producers are facing uncertainty as the transition from the biodiesel and renewable diesel blender credit to the producer credit. They are facing difficulties already as they try to negotiate feedstock and fuel offtake contracts for next year. The need for policy certainty is urgent."
Read more on DTN:
"Farmers and 45Z Tax Credit," https://www.dtnpf.com/…
Todd Neeley can be reached at todd.neeley@dtn.com
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