Ag groups welcome 45Z updates

WASHINGTON — Long-awaited actions by the U.S. Internal Revenue Service and Department of Energy to clarify the 45Z Clean Fuel Production Credits in support of domestic biofuel production were welcomed by commodity groups.

DOE updated the 45ZCF-GREET model to incorporate carbon intensity adjustments for certain regenerative agricultural practices, including practices used in soybean and corn production.

At the same time, IRS issued a notice that provides updated emissions rate information and allows qualifying agricultural practices to be reflected in calculating the credit. The Treasury Department indicated it will issue a final rule later this year.

Here’s what commodity groups said about the notice:

“This announcement is exciting and comes at the right time for farmers. By recognizing the conservation and regenerative practices an opportunity exists to extract value back to the farmer while providing greater certainty for the biofuels industry.”

Chris Gould, director

Illinois Corn Growers Association

“We are very pleased to see these agencies reaffirm the positive actions from the administration earlier this year, which recognized the importance of existing regenerative practices. We have been encouraged by the strong cooperation and emphasis on how this tax credit will benefit the individual farmer throughout the implementation process.

“This guidance also codifies positive changes to the credit regarding indirect land use change. We look forward to working with the Treasury Department this fall as it looks to issue a final rule by November. NCGA would also like to see book and claim acknowledged as a viable chain of custody methodology in the final rule.

“Book and claim allows farmers to sell the environmental value of their low-carbon corn directly to biofuel producers digitally, eliminating the need to physically segregate and transport those crops to a specific facility.”

Jed Bower, president

National Corn Growers Association

“Farmers and biofuel producers asked and the Trump administration has delivered. The 45Z tax credit is already driving significant investments in rural communities across the U.S., but this guidance is the key to ensuring farmers reap the benefits of the credit. We can’t wait to see how this new guidance accelerates the credit’s impact across rural America.”

Emily Skor, CEO

Growth Energy

“ASA appreciates DOE, IRS USDA and the administration for taking this important step to make the 45Z Clean Fuel Production Credit usable for biofuel producers. These actions provide greater economic certainty for the biofuels industry, which is a critical source of domestic demand for U.S. soybeans.

“As implementation moves forward, American Soybean Association will continue advocating for a flexible book-and-claim system that allows all farmers to participate in and receive value from the low-carbon attributes of their soybeans without requiring physical segregation throughout the supply chain. We look forward to continuing to work with the administration as policies are developed to strengthen the U.S. biofuels market and the soybean farmers who help supply it.”

Dave Walton, vice president

American Soybean Association

“This is the certainty our industry has been asking for, and it gives farmers and fuel producers the confidence to move forward.”

Amy France, chair

National Sorghum Producers

“Agriculture has always been the backbone of our economy, but today it’s also at the forefront of America’s energy future. From growing crops that feed our communities to producing the feedstocks that make sustainable aviation fuel possible, our agricultural producers are strengthening both our food system and America’s energy independence.

“SAF represents a powerful opportunity to create new revenue streams for farmers while advancing innovation across the energy and transportation sectors. It is an investment in rural communities, American jobs and a more resilient, diversified energy future.”

Alison Graab, executive director

Sustainable Aviation Fuel Coalition