Iowa Soybean and Biodiesel Industries Welcome Clarified Guidance on Clean Fuel Production Credit

Iowa Soybean and Biodiesel Industries Welcome Clarified Guidance on Clean Fuel Production Credit

July 24, 2024 | Brock Johnston

Ankeny, Iowa - The Iowa Soybean Association (ISA) and Iowa Biodiesel Board (IBB) today applauded U.S. Senator Joni Ernst (R-IA) for leading authorship of a bipartisan letter to the U.S. Dept. of the Treasury seeking clarifying guidance on the implementation of the Section 45Z Clean Fuel Production Tax Credit. The credit, established in the Inflation Reduction Act of 2022, is intended to incentivize farmers, fuel producers, and members of the biofuel supply chain to reduce greenhouse gas emissions.

Co-authored by Sens. Ernst, Duckworth (D-IL), Thune (R-SD) and four U.S. representatives from both parties, including Iowa U.S. Rep. Miller-Meeks (R-01), the letter urges the Treasury Department to leverage the 45Z credit to, "...provide a forward-looking, technology-neutral market signal to increase our country's production capacity for low-carbon, domestic renewable fuels and for existing biofuel production to invest in decarbonization."

Brent Swart, ISA president-elect and soybean farmer from Spencer, issued the following statement:

"While this production credit seeks to better position U.S. soybean farmers and homegrown biofuels as part of the nation's clean energy vision, clearer guidance must be correctly established to make sure American farmers and domestic biofuel production are prioritized. Farmers are eager to participate in growing the renewable fuels sector and are excited by the benefits these fuels have on our environment and local communities. Tighter profit margins, coupled with current 45Z guidance that only includes a limited suite of eligible climate-smart practices and 'bundling' requirements, could serve as barriers to farmer participation and access to these incentives. We look forward to working with federal leaders to ensure a broader variety of technologies and climate-smart practices best suited for each unique operation are eligible and without a 'bundling' requirement."

Grant Kimberley, IBB executive director and ISA senior director of market development, said:

"We commend Sen. Ernst and this bipartisan coalition for their leadership in making sure clean fuels are positioned to succeed as 45Z credit rules are finalized. Iowa farmers and biofuel producers have long been leaders in the renewable energy sector. As the letter states, the effective, timely and scientific implementation of 45Z is essential to realize the credit's full potential. This includes ensuring the credit is available only to domestic fuel producers and utilizes the GREET model for non-aviation fuels, with final rulemaking no later than Nov. 1, 2024."

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Not funded by the soybean checkoff

The Iowa Soybean Association (www.iasoybeans.com) is "Driven To Deliver" increased soybean demand through market development and new uses, farmer-focused research and results, timely information and know-how and policy initiatives enabling farmers and the industry to flourish. Founded in 1964 by farmers to serve farmers, ISA is governed by a board of 22 farmers to advocate on behalf of the state's 40,000 soybean producers, including more than 15,000 ISA farmer members and industry stakeholders.

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