Republicans want input from biofuel stakeholders about what future tax policy should look like now that they will have control in the White House and both chambers of Congress.
Rep. Randy Feenstra, R-Iowa, and other members of the House Ways and Means Committee have published a request for information on how to modify biofuel tax credits included in the Inflation Reduction Act. The law, passed in 2022 with no GOP support, extended the 40A Biodiesel Tax Credit, created the 40B credit for sustainable aviation fuel and authorized the 45Z clean fuel credit that takes effect in 2025, replacing both 40A and 40B.
Feedstock producers and others in the biofuel industry have taken issue with some of the climate-smart practice requirements included in 40B and have pushed for domestic feedstock requirements in 45Z.
Bills also have been introduced to provide extension of the 45Z credit, which is only in effect through 2027 under the IRA.
The Ways and Means request addresses commodities and practices currently accepted in the 40B credit and asks whether commonly discussed modifications like a domestic feedstock requirement would help or hurt the industry.
Meanwhile, House Democrats are still hopeful that the Biden administration can release 45Z guidance with necessary adjustments before the next administration takes office.
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Rep. Angie Craig, D-Minn., co-chair of the House Biofuels Caucus, said, based on conversations with Secretary of Agriculture Tom Vilsack, that she expects 45Z to provide more flexibility to growers in terms of what climate-smart practices qualify.
"We expect 45Z to get it more right. He implied that it would," Craig said of Vilsack. "I would just say to the administration to move this as fast as possible."
Rep. Nikki Budzinski, D-Ill., a member of the Congressional Sustainable Aviation Caucus, said that growers need stability now and she will continue to push the Biden administration to get the 45Z guidance out soon. She believes there's still time to get it done but she is hopeful that anything left incomplete will be picked up by the incoming administration.
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