Ethanol Blog

LINCOLN, Neb. (DTN) -- A bipartisan group of federal lawmakers asked U.S. Treasury Secretary Janet Yellen to publish rulemaking for the 45Z tax credit by Sept. 1, 2024, and to finalize a rulemaking by Nov. 1, 2024, in a letter signed by 52 senators and representatives on Tuesday.

The 45Z Clean Fuels Production Credit is considered to be one of the lynchpins in launching a sustainable aviation fuel industry.

The USDA recently opened a 30-day public-comment period set to expire on Friday, seeking more information on how 45Z should be implemented, https://www.dtnpf.com/….

"Lack of regulatory certainty is already putting thriving businesses at risk as fuel producers are unable to make important business decisions regarding their fuel," the letter said.

"Capital investment remains uncommitted, threatening certain projects and expansion plans, including the administration's stated goals to support new markets like sustainable aviation fuel and low-carbon transportation fuels."

The lawmakers ask Yellen to make the 45Z credit available only to domestic fuel producers and to use the Greenhouse gases, Regulated Emissions and Energy use in Technologies, or GREET, model not to include indirect land use change.

Lawmakers requested Yellen to include a "suite" of climate-smart agriculture practices without a "bundling" requirement, and to include a "broader array" of industrial decarbonization technologies, feedstocks and agricultural practices.

"To provide a clear market signal to the industry, the CSA rules included in the Section 40B GREET model must be revised for 45Z," the letter said.

"Limiting the choices to just three CSA practices, when the U.S. Department of Agriculture CSA and forestry mitigation activities list for FY2024 includes over 50 practices and 100 activities, disincentivizes CSA investment. The 'bundling' requirement for farmers to adopt multiple CSA practices before getting credit for any single practice creates a barrier to entry and will exclude many acres of farmland. In 45Z, more CSA practices must be included and farmers must be permitted to adopt them in a practice-by-practice fashion without a 'bundling' requirement."

Senators signing the letter include Joni Ernst, Tammy Duckworth, John Thune, Amy Klobuchar, Pete Ricketts, Tammy Baldwin, Tina Smith, Mike Rounds, Dem Fischer, Debbie Stabenow, Jerry Moran, Richard Durbin, Sherrod Brown, Gary Peters, Roger Marshall, Todd Young, Sam Graves, Marcy Kaptur, Max Miller, Robin Kelly, Jill Tokuda, Randy Feenstra, Angie Craig, Jimmy Panetta, Ron Estes and Sharice Davids.

The representatives include Brad Finstad, Eric Sorensen, Mariannette Miller-Meeks, Nikki Budzinski, David Scott, Pete Stauber, Michelle Fischbach, Kelly Armstrong, Donald Davis, Elissa Slotkin, Darin LaHood, Dusty Johnson, Zach Nunn, Ashley Hinson, Mark Alford, Mike Flood, Don Bacon, Derrick Van Orden, Mark Pocan, Ann Wagner, Mike Bost, Adrian Smith, Daniel Kildee, Tracey Mann, Rosa DeLauro and Jake LaTurner.

"The 45Z credit should be leveraged to provide a forward-looking, technology-neutral market signal to increase our country's production capacity for low-carbon, domestic renewable fuels and for existing biofuel production to invest in decarbonization," the lawmakers said.

"The effective, timely, and scientific implementation of 45Z is essential to realize the credit's full potential."

The letter said the Treasury "must recognize" a wider range of technologies, power sources and biofuels feedstocks that lower lifecycle emissions of transportation fuels.

The technologies, they said, should include energy (thermal and power) storage, both on-site and over-the-fence combined heat and power, mechanical vapor recompression, biomass to heat, advanced yeasts and enzymes, thermal vapor recompression, on-farm energy use reductions, and biogenic and non-biogenic carbon capture and storage.

"Moreover, additional biofuel feedstocks, such as sorghum, corn wet mills, additional oilseeds and corn kernel fiber should be recognized," the letter said.

The lawmakers asked Yellen to respond to the letter within 30 days.

Todd Neeley can be reached at todd.neeley@dtn.com

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