The American Coalition for Ethanol (ACE) has provided detailed feedback to the House Ways and Means Committee on the 45Z Clean Fuel Production Tax Credit. As federal agencies prepare to issue critical guidance, ACE emphasized the credit’s transformative potential for cleaner technologies and sustainable agriculture, while urging for enhancements to ensure effective implementation.
Key recommendations from ACE CEO Brian Jennings include:
• Extension of the 45Z tax credit: Advocating for a 7–10-year lifespan to encourage long-term investments in biofuels and climate-smart practices.
• Improved guidance and flexibility: Calling for updates to 45Z guidance informed by empirical data and science to avoid impractical bundling requirements that undervalue individual contributions to carbon intensity (CI) reductions.
• Support for climate-smart agriculture: Promoting individual and stacked agricultural practices for emissions reductions, with GREET model integration and flexible verification methods.
• Inclusion of emerging innovations: Encouraging frequent updates to include new practices and technologies, ensuring equitable access to benefits.
• Fair CI scoring policies: Advocating for updated land use change modeling to maintain competitive positioning of U.S. biofuels globally.
The new 45Z biofuels credit is set to begin Jan. 1, regardless of when official guidance is released. The Treasury Department indicated some details would come before Jan. 20, but did not clarify how thorough the eventual rule would be. Inside sources tell us the 45Z guidelines may be finalized by the incoming Trump administration.
Another key is the time it takes for the Environmental Protection Agency (EPA) to either approve or reject permits under various biofuel or carbon sequestration efforts. One industry source said his firm was initially told by EPA that it would take 12 months to either approve or reject their carbon sequestration request but to date the timeline is 31 months and still waiting.