Growth Energy: 45Z Tax Credit Guidance Must Be Scientific, Flexible, and Timely

WASHINGTON, D.C.-Growth Energy, the nation's leading biofuel trade association, continued to urge the Internal Revenue Service (IRS) today to follow the best available science when crafting its long-awaited guidance on the 45Z Clean Fuel Production Credit. Specifically, Growth Energy called on the U.S. Treasury Department to quickly issue guidance, preferably in a rulemaking, that accurately rewards the full spectrum of tools available to reduce bioethanol emissions at the plant and on the farm, including carbon capture and storage, process heat and energy, and climate-smart agriculture (CSA).

Growth Energy called on the IRS to provide flexibility for biofuel producers to integrate climate-smart technologies.

"For the 45Z credit to function properly, the IRS should reward renewable fuel producers that maximize their GHG reductions through the full scope of lower-carbon production processes," wrote Growth Energy CEO Emily Skor. "Fortunately the GREET model includes a broad range of at-the-plant technologies that should be incorporated into any 45Z model used in the SAF context and the emissions rate table used for 45Z on-road eligibility. At a minimum, any model or emissions rate table designed to estimate carbon intensity using best available practices must include adjustments for biomass power or heat, corn stover to process heat, combined heat and power, wet distiller's grains, membrane dehydration, vapor recompression, advanced yeasts and enzymes, energy storage, and zero-CI electricity from solar, nuclear, geothermal, hydropower, and biomass facilities."

With regard to climate-smart farming practices, "there is not a one-size-fits-all approach to CSA," wrote Skor. "Farmers should be encouraged to adopt as many CSA practices as possible, with the flexibility to choose the CSA practices that work best for the specific circumstances at their farms. Farmers across the country face distinct challenges and advantages based on the location of their farm, types of crops grown, soil health, weather patterns, local equipment costs, and individual risk tolerance, among many other factors."

Finally, Growth Energy reminded Treasury officials that time is of the essence and called on IRS to work quickly before October ends to take the critical first step of proposing a rulemaking with guidance for 45Z.

"At a minimum, the IRS should issue a proposed rule no later than November 1, 2024, including any proposed new models or model upgrades," wrote Skor.

Read the letter here.