Soybean growers and crushers on Tuesday applauded long-awaited guidance from the Treasury Department and Internal Revenue Service on the 45Z tax credit, while urging policymakers to complete work on proposed changes to the Renewable Fuel Standard.
The program, created as part of former President Joe Biden’s Inflation Reduction Act, was amended last year in President Donald Trump’s One Big Beautiful Bill Act (OBBB). The guidance proposes rules that would implement certain changes to the clean fuel production credit under the One Big Beautiful Bill Act. The agencies said the OBBB changed the clean fuel production credit to:
- Extend the credit to Dec. 31, 2029;
- Limit feedstocks to those grown or produced in the US, Mexico, or Canada;
- Add prohibited foreign entity restrictions;
- Broaden sale attribution for fuel sold through related intermediaries;
- Eliminate the special rate for sustainable aviation fuel;
- Add an anti-abuse provision to prevent double crediting;
- Prohibit negative emissions rates except for fuels derived from animal manure;
- Require feedstock-specific emissions rates for fuels derived from animal manure; and
- Exclude indirect land use changes from emissions rates.
In a joint statement, the American Soybean Association and the National Oilseed Processors Association welcomed the release of the guidance.
“Updating federal biofuel policies to prioritize soy-based fuels is a key ASA priority, and we applaud Treasury for this action which will help build domestic markets for U.S. soybeans,” said ASA President Scott Metzger.
“While Treasury’s work to update tax guidance is critical, ASA strongly urges the administration to immediately finalize RFS blending targets that complement the work of Treasury and Congress, by setting robust biofuel volumes and implementing new policies that will prioritize the utilization of U.S. soybeans in production,” he said.
The guidance is open to public comment and a public hearing has been set for May 28.