Clean Fuels Tax Credit to Be Finalized By January, Ag Secretary Says

Reuters’ Leah Douglas reported Tuesday that “U.S. Agriculture Secretary Tom Vilsack said on Tuesday he is confident that a clean fuels tax credit program set to take effect in 2025 will be finalized by end of the Biden administration in January.”

“The program would provide credits for the production of lower-emission transportation fuels, including sustainable aviation fuel (SAF),” Douglas reported. “‘I’m confident that we’re going to get ‘er done,’ Vilsack said at a summit in Washington, D.C., hosted by the biofuels trade group Growth Energy.”

“An April guidance for a SAF tax credit disappointed ethanol producers for requiring corn farmers to bundle a set of climate-friendly farming practices, meaning little to no ethanol would qualify,” Douglas reported. “The USDA is hoping to make more feedstocks and individual farming practices eligible for the credit and is in conversation with the energy and transportation departments about how to do so, Vilsack said.”

Vilsack Warns Against Excluding Foreign Feedstocks in Tax Credit Program

Agri-Pulse’s Philip Brasher reported that “banning the use of foreign biofuel feedstocks such as used cooking oil for a new tax credit could result in retaliation against U.S. farm exports, Agriculture Secretary Tom Vilsack said Tuesday. The Treasury Department is under pressure from some lawmakers to limit eligibility for the new 45Z clean fuels tax incentive to fuels made from feedstocks sourced in the United States. The 45Z credit, which was created by the Inflation Reduction Act, takes effect in 2025.”

“‘It’s a tough issue, because if you essentially create some kind of significant restriction in the effort of trying to protect commodities and items that are grown and raised here, you essentially invite the entire world to do the same thing,’ Vilsack told members of Growth Energy, an ethanol industry group,” according to Brasher’s reporting. “‘So, when we try to export corn, or we try to export soybeans, or we try to export pork, or we try to export poultry or beef or whatever, or ethanol, other countries go, ‘Wait a minute. They’re restricting this over here to protect their industry. Okay? We’ll do the same.'”

Allowing American tax dollars to go to foreign farmers out of fear of retaliation is ridiculous.

The Administration needs to put American farmers first — anything else is a betrayal of the people who feed & power our country. https://t.co/OUIshDPelk

— Sherrod Brown (@SenSherrodBrown) September 10, 2024

“In a letter to the Treasury Department last week, more than 40 lawmakers said the Biden administration should make it clear that the 45Z credit would only apply to biofuels produced from domestic feedstocks,” Brasher reported. “The lawmakers say that state and federal policies are driving demand for used cooking oil and tallow sourced overseas.”

Successful Farming’s Chuck Abbott reported that “Vilsack said ‘the real answer’ in writing 45Z regulations was to assure feedstocks meet expectations. For example, used cooking oil is eligible, but newly pressed vegetable oil is not. ‘So that gets into inspections and gets into certifications.'”

“As part of the administration’s work on 45Z regulations, the USDA is looking at farming practices that reduce the carbon intensity of crops and could be eligible for a share of the credits,” Abbott reported. “The 45Z credits are available for sustainable aviation fuels (SAF) with greenhouse gas emissions that are at least 45% lower than petroleum-based jet fuel. The administration has a goal of increasing SAF production to 3 billion gallons by 2030.”