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Biodiesel producers playing catch up on 45Z opportunities

The CEO of Clean Fuels Alliance America says uncertainty remains on exactly how the 45Z Clean Fuel Production Tax Credit will benefit biodiesel producers and soybean growers.

Donnell Rehagen tells Brownfield, “It’s a lot easier for an ethanol plant to work directly with a farmer to say if you do A, B, and C, we’ll actually pay you more for your corn.”  He says, “There’s not that connection between the soybean grower and a biodiesel plant. There’s that difference that kind of has to be figured out.”

He says some ethanol producers are already rolling out 45Z premium programs for farmers who comply with regenerative ag practices, but biodiesel producers are playing catch up.

“It’s a tax bill, and so that legislation has to provide clarity to the marketplace.”  He says, “Nobody wants to get their taxes wrong. And so, it has been a huge, huge change from what we’ve been used to under the previous blenders’ tax credit.”

Rehagen says the latest updates to the 45Z rule elevates soybean oil to one of the best crop biofuels in terms of carbon intensity, so he’s optimistic the biodiesel industry can develop programs to reward progressive soybean farmers.

The Internal Revenue Service is expected to publish the final 45Z rule in November.

AUDIO: Donnell Rehagen – Clean Fuels Alliance America