Young, Colleagues Urge Biden Administration to Increase U.S. Production of Biofuels

WASHINGTON – U.S. Senators Todd Young (R-Ind.), Joni Ernst (R-Iowa), and a bipartisan, bicameral group of 50 colleagues sent a letter 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 alternative 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 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:

• Safe harbor guidance for biofuel producers is published by Sept. 1, 2024, and 45Z rulemaking be completed by Nov. 1, 2024,
• 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,
• Eligible on-farm practices are expanded while any bundling mandates are removed, and
• A broader array of clean industrial technologies, feedstocks, and agricultural practices are eligible for the 45Z credit.

Full text of the letter is available here.