ACE and RFA give comments to House committee on 45Z tax credit

In Washington, American Coalition for Ethanol (ACE) has submitted its responses to the Supply Chains and Rural America tax teams of the House Ways and Means Committee regarding the 45Z Clean Fuel Production Tax Credit. This feedback on the biofuel tax provision comes as the U.S. Department of Agriculture readies to issue technical guidelines for climate-smart agriculture crops used for biofuel feedstocks, and the Biden U.S. Treasury department anticipates issuing preliminary 45Z guidance before the transition to the new administration.

“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.”

With certain modifications and proper implementation, the Clean Fuel Production Credit could create important new market opportunities for farmers, lower fuel prices for consumers, enhance energy security, and reduce emissions, the Renewable Fuels Association wrote last week in response to a request for information from members of the House Committee on Ways and Means.

“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.”

RFA called on the committee to consider extending the existing suite of biofuel tax credits—including the second-generation biofuel producer credit—while guidance is developed for 45Z and as potential modifications are debated in 2025. In addition, a more streamlined approach for registering for 45Z and securing IRS approval would help ensure biofuel producers are immediately ready when final rules are promulgated.