Bicameral, bipartisan bill introduced to restrict 45Z to domestic feedstocks, extend credit to 2034

U.S. Reps. Tracey Mann, R-Kansas, and Marcy Kaptur, D-Ohio, alongside Sens. Roger Marshall, R-Kansas, and Sherrod Brown, D-Ohio, introduced the Farmer First Fuel Incentives Act to restrict eligibility for the clean fuel production credit (45Z) to domestically produced feedstocks, and to extend the credit to 2034.

The 10-year credit will allow for more certainty as the U.S. biofuels industry builds infrastructure to open new markets for farmers, increase the production of biofuels across the country, and incentivize domestic feedstocks while continuing to support global renewable fuel production made from a wide array of feedstocks.

“In no world should American tax incentives first benefit foreign producers,” Mann said. “While the use of foreign feedstocks can play an important role in producing domestically manufactured ethanol, biodiesel, renewable diesel and sustainable aviation fuel, we must not displace harvest in America. Our legislation puts American farmers first by ensuring that American tax credits are incentivizing American-grown products.”

Kaptur, a senior member of the House appropriations subcommittee on agriculture, added, “I joined my colleagues in this important bicameral and bipartisan effort because helping American farmers, producers and growers goes beyond state and party lines. We must ensure the clean fuel production tax credit is structured in a way that benefits domestic producers, and not one that advantages foreign-produced feedstocks from China or Brazil. Our legislation will extend this credit through 2034 and bolster American energy independence by prioritizing American producers and the production of domestic biofuels.”

Marshall said, “It's very tough in farm country with high interest rates and low commodity prices, which is exactly why we can’t have a tax policy that will lower commodity prices even more. While we support free trade and open markets, we do not believe foreign feedstocks should be incentivized through the hard-earned dollars of U.S. taxpayers to the detriment of American farmers. This legislation puts farmers first to ensure they are the primary beneficiaries of renewable fuel tax incentives and provides businesses a decade of certainty.”

Brown said, “American tax dollars should support American farmers—not imported feedstocks. To continue to grow the biofuels industry and open new markets for Ohio farmers, we must stop taxpayer money from subsidizing a surge in Chinese cooking oil or any other foreign feedstock from infiltrating the American market. Our bipartisan bill ensures these investments benefit Ohio farmers and Ohio energy producers.”

The legislation is cosponsored by Reps. James Comer, R-Kentucky; Nikki Budzinski, D-Illinois; and Don Bacon, R-Nebraska; and Sens. Pete Ricketts, R-Nebraska; Amy Klobuchar, D-Minnesota; Deb Fischer, R-Nebraska; and Tammy Baldwin, D-Wisconsin.

The Farmer First Fuel Incentives Act is supported by Growth Energy, the National Oilseed Processors Association, National Corn Growers Association, American Soybean Association, Ohio Corn and Wheat Growers Association, Ohio Soybean Association, Kansas Corn Growers Association, Kansas Soybean Association, Kentucky Soybean Association, Scoular and Louis Dreyfus Company.

“Our farmers need policies that protect their ability to compete fairly as the United States strives to be a leader in renewable fuels markets,” said Ed Prosser, a senior vice president at Scoular. “We greatly appreciate Rep. Mann and his colleagues for introducing this legislation that helps ensure American agriculture will have a well-deserved seat at the table in the journey to lower the carbon intensity of our energy supply.”

NOPA President and CEO Kailee Tkacz Buller said, “NOPA commends this bipartisan, bicameral legislative effort that puts U.S fuel producers, U.S. crushers and U.S. farmers first. We thank Sens. Brown and Marshall and Reps. Mann and Kaptur for their leadership. We support free trade and open markets but do not believe foreign feedstocks should benefit on the backs of U.S. taxpayers to the detriment of U.S. farmers. Without this fix, the 45Z credit will incentivize the use of foreign feedstocks over those grown by U.S. farmers. Our industry has made significant investments to expand U.S. crush capacity by 30 percent and this fix is pivotal to ensuring these investments are delivered.”

ASA President Josh Gackle, a North Dakota soybean farmer, added, “Biofuel production paves a key path for our country to be a clean-energy leader, and U.S. farmers who grow the crops going into those biofuels take pride in helping reduce greenhouse-gas emissions while supporting the U.S. economy and energy independence. However, for continued growth of America’s promising biofuels industry, U.S. farmers need the support of a final 45Z rule that prioritizes domestically sourced feedstock.”

KSA CEO Kaleb Little said, “U.S. soybean farmers have been at the forefront of our domestic clean-energy production through the booming biodiesel and renewable diesel industry over the last decade. The Farmer First Fuel Incentives Act ensures our Kansas soybean growers maintain access to this vital market sector going forward and strengthens the clean fuel production credit for the future.”

Earlier this month, Mann and Kaptur led 39 of their colleagues in penning a letter to the U.S. treasury department urging it to expedite the issuance of final guidance for 45Z. 

Marshall and Brown led a similar letter in the U.S. Senate.