USDA and Industry Experts Navigate Complexity of 45Z Tax Credit

The 45Z clean fuel production tax credit was a major focus at the American Coalition for Ethanol's (ACE) 39th annual conference. The final panel on Friday provided an overview of policy, modeling, and compliance for biofuel producers.

Kate Zook, Acting Director of USDA's Office of Energy and Environmental Policy, explained that the production of regenerative agricultural biofuel feedstocks is covered in the USDA's final guidelines released in June. The guidelines include corn, soy, sorghum, and spring canola as eligible crops. The official calculator used to calculate farm-scale carbon intensity is USDA's Feedstock Carbon Intensity Calculator.

Zook stated that the Department of Energy must incorporate the calculator into the GREET model required by statute, and then Treasury must formally cite the USDA regulations. She emphasized that finalizing the 45Z tax credit in November this year would be a 'huge deal' for agriculture, allowing farmers to have more power in the market with their grain.

Kari Buttenhoff and Jamey Cline from Christianson PLLP provided insight into modeling and compliance aspects for ethanol producers. They acknowledged that every plant is different and the program is still not fully finalized. 'With different markets comes uncertainty,' said Cline, 'and this is exacerbated by the fact we don't have a final rule for 45Z.'