Midwest Farmers Eye Potential Benefits from Clean Fuel Tax Credit

The Clean Fuel Production Tax Credit (45Z) is a tax incentive for biofuel producers to reduce greenhouse gas emissions. This article explores its potential economic benefits for Midwest corn and soybean producers who implement approved practices.

A recent case study in Illinois found that cover crop adoption could lead to an estimated total 45Z tax credit value of $98.80 per acre, depending on the rest-of-system carbon intensity assumption. However, this value is not guaranteed to pass through to farmers and may be affected by various market factors.

To prepare for potential 45Z market opportunities, producers can take low-risk steps such as maintaining clear field-level records of conservation practices and supporting materials that could help verify practice adoption.