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More IRS guidance needed on clean fuel production tax credit
The senior policy director at Missouri Soybeans says more guidance is needed from the Internal Revenue Service on a Clean Fuel Production Credit that could incentivize soybean oil’s use in Sustainable Aviation Fuel.
Casey Wasser tells Brownfield updates to the 45Z tax credit in the Inflation Reduction Act has devalued soybean oil as a feedstock when it comes to carbon intensity.
“We’re really concerned with what the IRS has pushed out,” he says. “It’s really just a bureaucratic mechanism to score carbon intensity and we don’t agree they’ve taken in the full greenhouse gas lifecycle emissions to how some of these feedstocks are produced.”
Wasser says U.S. laws need to support U.S. feedstocks and there’s been an increase in cooking oil imports from China.
“We’ve seen a massive increase in imports of used cooking oil since the Inflation Reduction Act was passed. Some reports suggest it could be fraudulent, but none of it’s been audited. What I mean by fraudulent is that it’s claimed to be used cooking oil, but maybe it’s got traces of palm oil in it and other things.”
He says that and many unknown variables have reduced the value of U.S. soybean oil. Wasser says the American Soybean Association has asked Congress to get involved.
This week, U.S. Senator from Iowa Joni Ernst and bipartisan lawmakers in the U.S. House and Senate sent a letter to U.S. Treasury Secretary Janet Yellen asking the department to address 45Z issues. The letter also requests the department to issue regulations for 45Z by September and a final rule by November.
Ernst told Brownfield “Iowa farmers and biofuel producers are cutting-edge innovators that give renewable fuels the potential to add value to crops, secure American energy independence, create jobs, and offer consumers more affordable options at the gas pump. Guidance on the 45Z Clean Fuel Production Credit must be established to ensure our producers can fully reap all the benefits renewable fuels have to offer.”
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