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USDA set to announce Climate-Smart Biofuel guidelines following OMB review... The Office of Management and Budget (OMB) completed its review of the USDA’s “Technical Guidelines for Climate-Smart Agriculture Crops Used as Biofuel Feedstocks” interim final rule on Jan. 13. This rule, rooted in feedback gathered by USDA in July, focuses on climate-smart practices and their verification for biofuel production. Despite significant interest, particularly considering the Treasury Department’s recent preliminary guidance for the Clean Fuels Production Credit (45Z), no external meetings were requested or held regarding the rule since its submission to OMB on Dec. 6, 2024. USDA is now poised to release the finalized guidelines.
With the review now complete and USDA’s history of quickly announcing rules once that review is finished, this could signal that the updated 45ZCF-GREET model from the Department of Energy is poised for release shortly (see next item). The Biden administration in 2024 announced the updated GREET model for the sustainable aviation fuel (SAF) credit and the pilot program for climate smart corn and soybeans at the same time.
Stakeholders await updated GREET model details... The Biden administration announced on Jan. 10 the Department of Energy would release an updated version of the GREET model specifically for use with the Section 45Z Clean Fuels Production tax credit in the coming days. The 45ZCF-GREET model is essential for calculating the lifecycle greenhouse gas emissions of fuels to determine eligibility and credit amounts under Section 45Z. It will provide the methodology for taxpayers to determine the emissions rates of both SAF and non-SAF transportation fuels.
While full details of the updated model have not yet been released, it is expected to incorporate new data and methodologies specific to clean fuel production pathways. The Treasury Department indicated the model will be used alongside other approved methodologies, such as those from the International Civil Aviation Organization for sustainable aviation fuels.
The release of this updated GREET model is a crucial step in implementing the 45Z tax credit, as it will provide the technical framework for producers to calculate their eligibility and potential credit amounts. However, some industry groups have expressed disappointment that full details of the model were not included in the Jan. 10 guidance, leaving uncertainty for biofuel producers and farmers.
Progress report on SAF... The Department of Energy and other federal agencies released a report on the Sustainable Aviation Fuel Grand Challenge. The report highlights:
- Projected growth: Domestic projects could achieve over 3 billion gallons of annual SAF production by 2030, surpassing the initial target.
- Investment boom: Announced investments total $44 billion to expand SAF capacity.
- Progress: SAF production increased from 5 million gallons in 2021 to 52 million gallons by mid-2024.
Driving factors
- Inflation Reduction Act (IRA): Enacted in 2022, the IRA offers tax credits of $1.25 to $1.75 per gallon for SAF with at least a 50% lifecycle greenhouse gas reduction.
- Government advocacy: Federal efforts, including outreach to corn growers, highlight SAF as a key alternative in the clean energy transition.
- SAF Grand Challenge: A multi-agency initiative that sets ambitious SAF production goals and fosters collaboration.
Challenges and Uncertainties
- Policy delays: Guidance on IRA tax credits remains stalled relative to details, creating uncertainty for producers.
- Political risks: Possible policy rollbacks, particularly under the Trump 2.0 administration, could jeopardize progress.
- Production adjustments: Many SAF projects rely on converting renewable diesel facilities, which may require further incentives and infrastructure changes.
Upshot: Addressing these hurdles will be critical to sustaining growth and achieving the U.S. SAF production goals outlined in the report.
FDA proposes new front-of-package labeling to boost nutrition awareness... The Food and Drug Administration (FDA) has proposed a new front-of-package (FOP) labeling rule aimed at helping consumers make healthier food choices quickly and easily. This “Nutrition Info box,” a black-and-white design, will display levels of saturated fat, sodium, and added sugars, categorized as “Low,” “Med,” or “High,” along with the percent Daily Value for each nutrient. FDA anticipates this measure will empower consumers, encourage healthier product formulations, and contribute to reducing chronic diseases like heart disease, diabetes, and obesity. This new label is designed to complement the existing Nutrition Facts label found on the back of food packages, providing a more accessible and quick-reference guide for consumers.
Based on extensive research involving nearly 10,000 U.S. adults, this initiative seeks to complement the existing Nutrition Facts label and simplify decision-making for shoppers. If finalized, large manufacturers would have three years to comply, while smaller businesses (less than $10 million in annual food sales) would have four.
Public comments on the proposal are open until May 16.
GOP pushes $85 billion border security plan ahead of Trump’s inauguration... The plan according to reports focuses on staffing for Border Patrol and Immigration and Customs Enforcement (ICE), expanding detention capacity and advancing Trump’s intentions to complete the U.S./Mexico border wall. Additional funds are earmarked for recruitment, training, and retention bonuses to address personnel shortages.
The package includes upgrades such as license plate readers, scanners, counter-drone equipment and fentanyl detection technology. Clearing overgrown vegetation to improve border visibility and funding for agent body armor are also priorities.
To offset costs, Republicans propose increasing fees for asylum applications and other immigration processes. Budget hawks like Sen. Rand Paul (R-Ky.) are pushing for corresponding spending cuts to balance the increases.
Of note: Using budget reconciliation, Republicans aim to bypass the Senate’s 60-vote threshold, focusing on budget-related measures that adhere to parliamentary rules. However, broader immigration policy overhauls remain excluded due to procedural constraints.
USDA opens 2025 enrollment for crop and dairy safety-net programs... USDA announced enrollment dates for its 2025 Agriculture Risk Coverage (ARC), Price Loss Coverage (PLC) and Dairy Margin Coverage (DMC) programs. Producers can apply for ARC and PLC from Jan. 21 to April 15 and for DMC from Jan. 29 to March 31.
ARC and PLC safeguard farmers from significant drops in crop prices or revenues, while DMC provides financial support to offset milk and feed price differences. Producers must sign a contract annually to enroll, even if not changing program elections.
Key program highlights include:
- ARC and PLC: Offer tailored crop-by-crop or whole-farm protection, with election changes optional but enrollment mandatory each year.
- DMC: Provides margin protection with flexible coverage options, including a $0.15 per hundredweight option for $9.50 coverage.
Producers are encouraged to contact their local FSA office for more details or visit the USDA’s ARC, PLC and DMC webpages.
U.S. producer prices rose less than expected in December... The producer price index (PPI) rose 3.3% annually in December, the most since February 2023, though lower than expected. Excluding volatile food and energy prices, core PPI rose 3.5% annually, the same as the previous month.
The PPI data provides a nuanced picture of the inflationary landscape, suggesting that while some pressures persist, overall wholesale inflation is showing signs of moderation.