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Farm practices take center stage in updated 45Z Clean Fuel guidance

Ag and biofuel groups are welcoming further guidance on the 45Z Clean Fuel Production Tax Credit.

Growth Energy senior vice president of regulatory affairs Chris Bliley says the update is exciting for biofuel producers and for farmers.

“This actually shows that farmers can reap the benefits of the credit. So we’re really appreciative of USDA, the Department of Energy, and the Treasury Department for moving decisively to tie the farm practices to the 45Z Clean Fuel Production Credit.

He tells Brownfield the USDA model ties specific carbon reductions to regenerative ag practices for biofuel feedstocks.

“And what we’ve really been waiting for is for Treasury and the DOE to essentially take what USDA has done and pull that into the regulatory framework for the 45Z credit.”

Bliley says the IRS and Department of Treasury have not finalized the 45Z regulations, but this week’s changes are now in place.

National Corn Growers Association president Jed Bower, an Ohio farmer, says the guidance, in conjunction with Tuesday’s updated Department of Energy GREET model, will give safe harbor to previously recognized “on farm” practices in reducing the carbon intensity of qualifying fuels.

The American Biogas Council says the guidance provides a path to move the biogas industry forward and turn more of the organic waste produced in communities into domestic renewable fuel.