Duckworth Joins Ernst to Call for Expanded U.S. Production of Biofuels

July 25, 2024

Duckworth Joins Ernst to Call for Expanded U.S. Production of Biofuels

45Z guidance must be published in a timely manner with the American producer at the forefront to effectively grow the renewable fuel industry.

[WASHINGTON, D.C.] - U.S. Senator Tammy Duckworth (D-IL) this week joined U.S. Senator Joni Ernst (R-IA) and 50 bipartisan, bicameral colleagues in urging the U.S. Department of the Treasury to issue timely guidance on the 45Z Clean Fuel Production Credit to give farmers, blenders, retailers, and fuel users certainty and the time needed to make additional clean fuel projects a reality. The 45Z Clean Fuel Production Credit consolidates and replaces several fuel-related credits currently scheduled to expire at the end of the year. While 45Z was written to increase the domestic production of clean, homegrown biofuels, guidance is still needed from the Treasury on how farmers and renewable fuel producers can participate in this new market.

"The 45Z credit should be leveraged 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," the lawmakers wrote. "Lack of regulatory certainty is already putting thriving businesses at risk as fuel producers are unable to make important business decisions regarding their fuel."

"If properly implemented, this credit can fully mobilize the biofuel industry, growing our domestic manufacturing base, creating jobs, diversifying the U.S. energy portfolio, adding value to crops grown by American farmers, and offering consumers better, more affordable, and lower carbon options at the fuel pump and in the skies," the lawmakers concluded.

The letter, which has bicameral and bipartisan support, requests that:

1. Safe harbor guidance for biofuel producers is published by Sept. 1, 2024, and 45Z rulemaking be completed by Nov. 1, 2024,
2. The 45Z credit is available only to domestic fuel producers and uses the science-based Greenhouse gases, Regulated Emissions and Energy use in Technologies (GREET) model without additional indirect effects or penalties,
3. Eligible on-farm practices are expanded while any bundling mandates are removed, and
4. A broader array of clean industrial technologies, feedstocks, and agricultural practices are eligible for the 45Z credit.

Duckworth and Ernst led the letter along with U.S. Senators John Thune (R-SD) and Amy Klobuchar (D-MN), and U.S. Representatives Brad Finstad (R-MN-01), Eric Sorensen (D-IL-17), Mariannette Miller-Meeks (R-IA-1) and Nikki Budzinski (D-IL-13). Full text of the letter is available online.

In the Senate, Duckworth has been a leader in supporting biofuels. Last week, Duckworth traveled to Vietnam for an official Senate visit that included meetings with government and trade officials to highlight the benefits of increasing imports of corn and soy ethanol from Illinois. As demand for gasoline has increased throughout Vietnam, biofuel imports from our Illinois farmers can help meet this demand while providing a more reliable, cost stable and environmentally friendly fuel alternative with ethanol blends.

Duckworth's official visit builds on her continued efforts to help advocate for Illinois and Illinois agriculture across the globe-following an official visit to Taiwan she helped secure a commitment from Taiwan to purchase an estimated $2.6 billion of Illinois's corn and soybeans, and following an official visit to Japan, Japan announced a regulatory change that will lead to an increase in imports from U.S. biofuel producers, supporting our farmers and growing Illinois's economy. Last year, South Korea also committed to several biofuels expansions, including a mandate 3.5 percent biodiesel blending, which will be achieved with increased U.S. imports.

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