(WASHINGTON D.C.) — The House Ways and Means Committee has sent out a Request for Information (RFI) about the 45Z clean fuel production credit and multiple ethanol/biofuel groups responded. That included Growth Energy, Renewable Fuels Association and the American Coalition for Ethanol.
“Our industry is supportive of 45Z because it provides our members the ability to make costly capital investments to meet carbon constraints established by U.S. subnational policy and foreign trading partners,” said Growth Energy CEO in the letter. “While we do not actively promote and seek these low-carbon regimes, we have to work within these programs…energy products in general will be required to meet a lower carbon intensity (CI) over the next several decades, and most of these investments needed to reduce CI are difficult—if not impossible—to do without something like the 45Z tax incentive.”
“A successful tax credit program would result in greatly expanded production and use of U.S.-produced low-carbon biofuels; creation of new value-added markets for U.S. farm commodities; lower fuel prices for consumers; and reduced dependence on foreign energy sources,” wrote RFA President and CEO Geoff Cooper. “Success can only be achieved if the tax credit program is durable, broadly scalable, and implemented in an efficient and straightforward manner for taxpayers.”
“The 45Z Clean Fuel Production Tax Credit has the potential to be transformative, incentivizing investments in cleaner technologies and sustainable practices that directly benefit America’s farmers, biofuel producers and the environment,” said Brian Jennings ACE CEO. “ACE is committed to ensuring this policy delivers maximum value for our ethanol producer members and looks forward to remaining actively engaged in its implementation under the current administration and the next.”
Read the letter from Growth Energy: CLICK HERE
Read the letter from RFA: CLICK HERE
Read the key points from ACE below:
Extension of 45Z Tax Credit
ACE strongly supports extending the 45Z tax credit beyond its current sunset in 2027. The three-year lifespan is insufficient for biofuel producers and farmers to fully realize the benefits of adopting new technologies and climate-smart agricultural practices. ACE recommends a total lifespan of 7 to 10 years to provide the certainty necessary for long-term investment and innovation.
Addressing Guidance Delays and Modifications
While the current statutory language provides sufficient latitude for Treasury to develop guidance, ACE highlights potential risks from delays or misaligned guidance, as seen in the 40B SAF Tax Credit. For example, the “all-or-none” bundling requirement for agricultural practices was impractical and undervalued individual ag practice contributions to carbon intensity (CI) reductions. ACE advocates for regular updates to 45Z guidance based on the best available science and empirical data from the ACE-led
Regional Conservation Partnership Program (RCPP) projects.
Enhancing Climate-Smart Agricultural Practices
Treasury and USDA must allow individual and stacked agricultural practices to qualify toward emission rates for 45Z credits, avoiding restrictive bundling approaches. Leveraging the GREET model — the global gold standard for GHG quantification — and incorporating data from ACE’s real-world RCPP initiatives will ensure accurate CI scoring and greater farmer participation. ACE’s RCPP projects, spanning 10 states and involving nearly 100,000 acres of farmland, provide critical data to validate the GHG benefits of practices such as reduced tillage, nutrient management and cover crops. Guidance should reward individual climate-smart practices, maintain flexible verification methods and be updated regularly based on the best-available science and modeling.
Inclusion of Emerging Practices and Feedstocks
ACE urges Treasury and USDA to routinely update eligibility criteria to reflect advancements in agricultural technologies and practices. Empowering farmers with open-source tools for verification and compliance will enable broader participation and equitable access to tax credit benefits.
Fair Land Use Change Policies
Reliance on outdated economic modeling could undermine the integrity of CI scoring and disadvantage U.S. biofuels in global markets.
