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Toledo, Ohio - On Friday, September 6, Congresswoman Marcy Kaptur (OH-09) and Congressman Tracey Mann (KS-01) led 39 of their colleagues in a bipartisan letter to the US Department of Treasury urging expedition in issuing final guidance for the Clean Fuel Production Credit in advance of its January 1 deadline and restriction of eligibility to renewable fuels made from domestic feedstocks by domestic fuel producers. Once implemented, the credit, as intended by Congress, will bolster American energy independence by prioritizing American producers and the production of biofuels made with domestically produced feedstocks. The Members urged Secretary Yellen to ensure the credit isn't structured in a way that advantages foreign-produced feedstocks including Chinese used cooking oil, and Brazilian tallow, which have flooded the US market in recent years, undermining American farmers.
Other signers of the letter include Representatives Mark Alford (MO-04), Kelly Armstrong (ND-AL), Don Bacon (NE-02), Jim Baird (IN-04), Jim Banks (IN-03), Nikki Budzinski (IL-13), Larry Bucshon (IN-08), Eric Burlison (MO-07) James Comer (KY-01), Emanuel Cleaver (MO-05), Angie Craig (MN-02), Rick Crawford (AR-01), John Duarte (CA-13), Ron Estes (KS-04), Randy Feenstra (IA-04),Mike Flood (NE-01), Sam Graves (MO-06), Ashley Hinson (IA-02), Erin Houchin (IN-09), David Joyce (OH-14), Robin Kelly (IL-02), Trent Kelly (MS-01), Darin LaHood (IL-16), Jake LaTurner (KS-02), Max Miller (OH-07), Mariannette Miller-Meeks (IA-01), Marc Molinaro (NY-19), Frank Mrvan (IN-01), Zach Nunn (IA-03),Greg Pence (IN-06), Mark Pocan (WI-02), Harold Rogers (KY-05),David Scott (GA-13), Austin Scott (GA-08), Adrian Smith (NE-03), Eric Sorenson (IL-17), David Valadao (CA-22), Ann Wagner (MO-02), Rudy Yakym (IN-02).
"As you know, the Clean Fuel Production Credit (45Z) is intended to stimulate the development of a domestic fuel supply chain," the Members wrote. "If drafted and implemented per congressional intent, 45Z will support American energy independence by incentivizing the production of biofuels made with domestically produced feedstocks, while continuing to support global renewable fuel production made from a wide array of feedstocks."
"Treasury must ensure that the 45Z tax credit is only applicable to fuels produced domestically with domestic feedstocks, so American farmers, processors, businesses, investors, and end-users can benefit from the 45Z tax credit and the long-anticipated promise of new biofuels markets," the Members continued.
The letter is supported by American Farm Bureau Federation, National Farmers Union, National Oilseed Processors Association, American Soybean Association, National Corn Growers Association, Growth Energy, Scoular, Louis Dreyfus Company, and the Ohio Soybean Association.
"Without this fix, the 45Z credit will incentivize the continued use of foreign feedstocks over US feedstocks produced by American farmers. NOPA members have made commitments to expand US crush capacity by 30% with $6 Billion in investments to process domestic row crops into biofuels in line with state and federal renewable fuel and tax provisions, however current market conditions are beginning to call into question the viability of future investments," said NOPA President and CEO Kailee Tkacz Buller. "We firmly support free trade and open markets but cannot stand by and let foreign feedstocks benefit to the detriment of US crushers, US farmers and US taxpayers alike. Thank you to the leadership of this bipartisan group for not only standing up for domestic fuels and domestic feedstocks, but the viability of this critically important domestic industry".
"The federal clean fuel production tax credit is meant to foster a domestic market for cleaner burning fuels that promote American jobs and energy independence," said Rusty Goebel, President, Ohio Soybean Association. "Foreign imported feedstocks shouldn't benefit from American taxpayer investments in this industry. Ohio Soybean farmers support Congresswoman Kaptur's efforts to ensure Ohio-grown feedstocks aren't undercut by foreign suppliers."
"In its current form, the 45Z credit will use American tax dollars to displace the American farmer by favoring foreign products, and, therefore, it must be limited to domestic feedstocks," said Scoular Senior Vice President Ed Prosser. "The bipartisan letter led by Representative Mann and his bipartisan coalition puts farmers in a competitive position, and we salute him for his leadership on this critical issue."
In July 2024, Kaptur and Mann and joined 52 bicameral and bipartisan colleagues in a letter urging US Treasury Secretary Janet Yellen to take immediate action to finalize the implementation rules for 45Z.
The members requested a response to their new September 6, 2024 letter by September 27, 2024. The full letter can be found by clicking here, or reading below:
Dear Secretary Yellen:
We write to urge the US Department of Treasury to expedite the issuance of proposed and subsequential final guidance for the Clean Fuel Production Credit in advance of its January 1, 2025 statutory deadline and to restrict the eligibility to renewable fuels made from domestic feedstocks by domestic fuel producers. Finalizing this rule in a timely manner and prioritizing domestic feedstocks will provide farmers, renewable fuel producers, end-users, and other biofuels stakeholders with the certainty and clarity they need to make planting, business, and investment decisions.
As you know, the Clean Fuel Production Credit (45Z) is intended to stimulate the development of a domestic fuel supply chain and utilize domestic feedstocks to lead the way in lowering the carbon domestic fuel supply chain and utilize domestic feedstocks to lead the way in lowering the carbon intensity of American transportation fuels.If drafted and implemented per congressional intent, 45Z will support American energy independence by incentivizing the production of biofuels made with domestically produced feedstocks, while continuing to support global renewable fuel production made from a wide array of feedstocks. While the use of foreign feedstocks can play an important role in producing domestically manufactured ethanol, biodiesel, renewable diesel, and sustainable aviation fuel, Treasury must be clear that 45Z only applies to biofuels produced from domestic feedstocks by domestic fuel producers.
State low carbon fuel standard programs and the federal 40B Sustainable Aviation Fuel Tax Credit are driving demand for foreign "waste" feedstocks over domestically produced corn, soybeans, and canola. These programs are built on carbon industry modeling that does not account for the full lifecycle of these "waste" feedstocks. As a result, imports of used cooking oil from China have increased from around 45 kilo metric ton (KMT) in 2022 to more than 600 KMT in 2023. Imports of tallow have increased 400 percent over the last five years,and there is also significant concern around future imports of Brazilian safrinha corn crops, which reached record levels of production in 2023.This market dynamic is unsustainable. Treasury must ensure that the 45Z tax credit is only applicable to fuels produced domestically with domestic feedstocks, so American farmers, processors, businesses, investors, and end-users can benefit from the 45Z tax credit and the long-anticipated promise of new biofuels markets.
Again, we urge you to issue proposed and subsequent final guidance for 45Z in advance of January 1, 2025, and to restrict the eligibility to renewable fuels made from domestic feedstocks by domestic fuel producers. Please reply with your intention to do so by September 27, 2024.
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