Today, the U.S. Treasury Department released long overdue preliminary guidance on how biofuel producers can claim the new 45Z clean fuel production credit in a notice of intent to propose regulations and a notice providing the annual emissions rate table, further explaining how emissions rates and carbon intensity will be calculated under the 45Z credit.
American Coalition for Ethanol (ACE) CEO Brian Jennings issued the following statement in response:
"ACE thanks the Biden Treasury Department for issuing preliminary guidance, acknowledging the need to incorporate climate-smart agriculture practices, and agreeing that emission values should be determined using the most recent GREET model which is updated annually. Despite this step in the right direction, the job is unfinished because the preliminary guidance doesn’t provide the clarity our industry has been awaiting. The guidance omits key details essential for biofuel producers to capitalize on 45Z, including how climate-smart agriculture practices will be incorporated. Our focus will be to engage the incoming Trump administration to make the final regulations for the 45Z credit beneficial for our members.
"We are eager to collaborate with the Trump Treasury team to ensure 45Z is implemented effectively, with consideration of USDA’s technical guidelines on climate-smart agriculture practices that are under development. Since ag-based feedstocks represent about half of ethanol’s carbon footprint, it is critical to allow farmers and ethanol producers to realize the full value of sustainable farm practices through this tax credit. We once again applaud USDA Secretary Vilsack for his leadership on this topic. ACE will continue advocating for flexibility that recognizes the unique contributions of facility-specific process technologies and climate-smart farming practices to achieve meaningful carbon reductions.
“We have strongly urged both Treasury and USDA to update 45Z guidance for ag practice credit values on a routine basis by incorporating the best available science and results from real-world activities, such as the two USDA-Natural Resource Conservation Service (NRCS) Regional Conservation Partnership Programs (RCPPs) currently being led by ACE. These projects are specifically designed to address the perceived need for more empirical data on the GHG benefits of ag practices and help improve the accuracy of the GREET model, and we look forward to the release of the 45ZCF-GREET model for use in determining emissions rates for 45Z in the coming days.”