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Ag industry mixed on U.S. Senate’s approach to SAF tax credits

The CEO of the Renewable Fuels Association says the U.S. Senate is taking a different approach to Sustainable Aviation Fuel tax credits in its budget proposal compared to the U.S. House and neither are perfect.

“This thing is a long way from being done and there’s still a lot of differences to iron out.”

Geoff Cooper tells Brownfield the Senate Finance Committee’s budget proposal preserves the transferability for the 45Z tax credit over a seven-year period.

“The expiration of the transferability in the House bill was a real problem for us and we’re grateful the Senate Finance Committee heard our concerns.”

Both versions of the bill also extend the 45Z tax credit for four years. But Cooper says the Senate’s draft includes other provisions that would limit ethanol producers’ participation. And it doesn’t guarantee farmers will be credited for using smart climate ag practices to grow crops used for biofuels.

“That really remains up to regulators and the U.S. Treasury Department.”

Cooper says the Senate’s approach reduces the value of the credit for Sustainable Aviation Fuel.

“Under current law, SAF could qualify for as much as $1.75 per gallon and the Senate’s version would knock that down to a maximum of $1 per gallon.”

He says the U.S. Senate didn’t completely ban foreign feedstocks from being used to make biofuels, while the U.S. House version does.

Other ag organizations, including the Missouri Soybean Association, say they’re disappointed the U.S. Senate didn’t completely ban foreign feed stocks from qualifying for 45Z. Cooper says he’s optimistic there can be good compromises made as the bill goes through the reconciliation process

“We have no doubt it’s not going to be perfect right out of the gate, but what we’re hoping for is there’s a willingness in Congress and the administration to keep working on this and keep improving it. And keep doing everything we can to get it right.”

The U.S. Senate is expected to consider its version of the budget reconciliation package next week and has a goal to pass the bill before Independence Day.

Hear Brownfield’s interview with Geoff Cooper.