An ethanol industry leader is worried the Department of Energy could block the inclusion of low-carbon farming practices in final rules for the 45Z biofuel production tax credit. 

American Coalition for Ethanol CEO Brian Jennings is calling on Republican lawmakers to weigh in with DOE officials on the issue.

The push comes as the Treasury Department considers final rules for implementation of the 45Z credit. The incentive originated in the Inflation Reduction Act during the former Biden administration, and then was changed last year by the GOP-led Congress in ways that won strong approval from the ag world.

"My concern is there are political people at the Department of Energy who are hellbent to promote fossil fuels and only fossil fuels, and do not understand the critical role that farmers and ethanol producers play in keeping rural America going," Jennings told Agri-Pulse following his South Dakota-based group's two-day D.C. fly-In. 

Treasury's proposed 45Z regulations last month didn't embrace a path for growers and renewable fuel producers to monetize regenerative techniques like cover cropping, precision use of fertilizer and no-till farming. Instead,

Treasury, which is consulting with DOE and the Department of Agriculture on the rules, indicated that sustainable ag will ultimately be folded into the regulations, but didn't provide a timeline.

Final 45Z regulations are now under consideration by the the Trump administration. The 45Z credit's base value hinges on the carbon-dioxide footprint, or CI score, of a fuel's entire production chain. It replaced a previous flat $1-a-gallon credit for biomass-based diesel.

As carbon-capture-and-sequestration pipelines have been controversial in major corn and ethanol states like South Dakota and Iowa, the importance of regenerative farming practices as a way to determine CI scores has intensified, according to the ACE CEO. 

"The next best opportunity to reduce CI at an ethanol facility is to make sure the low-carbon farming practices used to produce the corn also can be monetized through the tax credit," Jennings said.

"It’s a big damn deal ... it’s billions of dollars annually for rural America."

Jennings said Republican lawmakers who backed 45Z last year understood that valuing regenerative ag farming would be part of it. 

"We are going to need those Republican members of congress to pick up the phone and make some calls to the Energy Department and rattle some cages," he said.

DOE officials didn't immediately respond to a request for comment. 

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