More than three dozen members of the U.S. House of Representatives are urging the U.S. Treasury Department to ensure only fuels manufactured from domestically sourced feedstocks qualify for the upcoming 45Z Clean Fuel Production Credit.
Reps. Tracey Mann, R-Kan., Marcy Kaptur, D-Ohio, and 39 of their colleagues on Sept. 6 sent a letter to U.S. Treasury Secretary Janet Yellen urging her agency to expedite the release of proposed and final guidance for the 45Z tax credit in advance of the Jan. 1, 2025, and restrict eligibility for the credit to renewable fuels made from domestic feedstocks by domestic fuel producers.
“Finalizing this rule in a timely manner and prioritizing domestic feedstocks will provide farmers, renewable fuel producers, end-users, and other biofuels stakeholders with the certainty and clarity they need to make planting, business, and investment decisions,” the lawmakers wrote.
“If drafted and implemented per congressional intent, 45Z will support American energy independence by incentivizing the production of biofuels made with domestically produced feedstocks, while continuing to support global renewable fuel production made from a wide array of feedstocks,” they added in the letter. “While the use of foreign feedstocks can play an important role in producing domestically manufactured ethanol, biodiesel, renewable diesel, and sustainable aviation fuel, Treasury must be clear that 45Z only applies to biofuels produced from domestic feedstocks by domestic fuel producers.”
Within the letter, the lawmakers explain that state low carbon fuel standard (LCFS) programs and the 40B Sustainable Aviation Fuel (SAF) tax credit have driven demand for foreign “waste” feedstocks, such as used cooking oil from China. According to the lawmakers, these programs are built on carbon modeling that does not account for the full lifecycle of these waste feedstocks. The letter cites data showing imports of used cooking oil from China have increased from approximately 45,000 metric tons in 2022 to more than 600,000 metric tons in 2023, while imports of tallow have increased 400% over the past five years. The lawmakers also stress there is significant concern around future imports of Brazilian safrinha corn crops, which reached record levels of production last year.
“This market dynamic is unsustainable,” the lawmakers wrote. “Treasury must ensure that the 45Z tax credit is only applicable to fuels produced domestically with domestic feedstocks, so American farmers, processors, businesses, investors, and end-users can benefit from the 45Z tax credit and the long-anticipated promise of new biofuels markets.”
In addition to Mann and Kaptur, the letter is signed by Reps. Mark Alford, R-Mo.; Nikki Budzinski, D-Ill.; Kelly Armstrong, R-N.D.;, Don Bacon, R-Neb.;, Jim Baird, R-Ind.; Larry Bucshon, R- Ind.; James Comer, R-Ky.; Ron Estes, R-Kan.; Mike Flood, R-Neb.; Sam Graves, R-Mo.; Trent Kelly, R-Miss.; Jake LaTurner, R-Kan.; Max Miller, R-Ohio; Marc Molinaro, R-N.Y.; Greg Pence, R-Ind., Ann Wagner, R-Mo.; Rudy Yakym, R-Ind.; Jim Banks, R-Ind.; Angie Craig, D-Minn.; Rick Crawford, R-Ark.; Randy Feenstra, R-Iowa; Ashley Hinson, R-Iowa; Darin LaHood, R-Ill; Mariannette Miller-Meeks, R-Iowa; David Scott, D-Ga.; Austin Scott, R-Ga.; Adrian Smith, R-Neb.; Eric Sorenson, D-Ill.; David Valadao, R-Calif.; Robin Kelly, D-Ill.; Eric Burlison, R-Mo.; Erin Houchin, R-Ind.; David Joyce, R-Ohio; Zach Nunn, R-Iowa; Harold Rogers, R-Ky.; John Duarte, R-Calif.; Emanuel Cleaver, D-Mo.; Frank Mrvan, D-Ind.; and Mark Pocan, D-Wisc.
The letter is also supported by American Farm Bureau Federation, National Farmers Union, National Oilseed Processors Association, American Soybean Association, National Corn Growers Association, Growth Energy, Scoular, and Louis Dreyfus Co.
A full copy of the letter is available on Mann’s website.
