‘American Farmers Stuck in Neutral’ With Biden Administration’s 45Z Guidance, Says Renewable Fuels Industry

The Biden Administration’s long-awaited 45Z tax credit guidance on the production of renewable biofuels was released Friday, 10 days before the administration hands over power to president-elect Donald Trump. The interim guidance is not a full-scale proposal, as there is little mention of agricultural practices in the document, per Agri-Pulse. One main omission the article cited was the lack of guidance over feedstocks.

The tax credit originated from the Inflation Reduction Act (IRA), and sustainable aviation fuels (SAFs) with greenhouse gas emissions at least 45% lower than petroleum-based jet fuel are eligible for 45Z credits.

The Department of the Treasury and the Internal Revenue Service (IRS) opened public comment on the guidance until April 10, 2025. Comments may be submitted electronically or via physical mail. 

Multiple sections of the agriculture, renewable energy, and biofuels industries reacted to the news negatively, with many citing a lack of clarity from the Biden administration.

Renewable Fuels Association (RFA)

RFA is the leading trade association for America’s ethanol industry, driving growth in sustainable renewable fuels and bioproducts for a better future. 

In a statement released Friday by RFA, President and CEO Geoff Cooper said, “While we are pleased to see Treasury has finally released its long overdue guidance on 45Z, today’s package falls short of expectations and remains incomplete.” Cooper said the guidance is “a potential step in the right direction, but much work remains to be done before clean fuel producers, farmers, and consumers can fully benefit from the 45Z program.

“Unfortunately, today’s guidance does not provide the certainty or flexibility that ethanol producers were looking for, and many questions remain unanswered,” Cooper said. “We do not believe this guidance alone will spur the investment, innovation, and job creation in the clean fuels sector that Congress and the administration intended. It simply isn’t bankable, investible, or otherwise actionable for the vast majority of biofuel producers.

“For the 45Z program to truly drive innovation and value creation in the marketplace, the credit must allow for the inclusion of efficient farming practices, recognition of additional feedstocks and ethanol production technologies, flexible supply chain management tools, and the ability for individual producers to secure their own unique carbon intensity values,” Cooper said. “But most importantly, producers will not act on this or any subsequent guidance unless they have the assurance that the credit will be durable, stable, and reliably available in the future.”

Growth Energy

As the nation’s largest biofuel trade association, Growth Energy is the leading voice of America’s biofuel industry. Members of the association operate and support biomanufacturing facilities at the heart of America’s bioeconomy, delivering a new generation of plant-based energy and climate solutions. 

Growth Energy issued a statement Friday in which CEO Emily Skor said, “This long-overdue guidance is far from complete – it still lacks the critical details that are needed to help ensure that American biofuel producers and their farm partners can lead the world in clean fuel production.” 

Skor said that her association appreciates what Secretary Vilsack has done to “champion our issues on behalf of rural America.” However, she said today’s announcement “falls short of providing the information that our industry and its farm partners need, including a model for an expanded number of eligible decarbonization technologies and guidance on climate smart agriculture (CSA) practices.

“We look forward to working with the next administration to fill in the gaps left by today’s announcement and to ensure this economic opportunity for the struggling farm economy is not left on the table,” Skor said. “Demand for low carbon energy will continue to grow with or without us, and we need strong policy support in order to unleash the kind of investments that will position the U.S. for leadership in this market. Today’s guidance does not satisfy that need.”

Clean Fuels Alliance America

Clean Fuels Alliance America is the U.S. trade association representing the entire biodiesel, renewable diesel, and sustainable aviation fuel supply chain, including producers, feedstock suppliers, and fuel distributors. Clean Fuels receives funding from a broad mix of private companies and associations, including the United Soybean Board, Nebraska Soybean Board, and other state checkoff organizations.

“We look forward to working with our members to evaluate the overdue guidance and forthcoming GREET model,” said Clean Fuels Vice President of Federal Affairs Kurt Kovarik. “We appreciate USDA, Treasury, and the Department of Energy for issuing guidance. We’re hopeful that today’s notice provides the necessary certainty that producers can rely on ahead of the final rules. Clean fuel producers still need the carbon intensity scores from the GREET model to calculate their credit values; this missing information is key to enabling them to negotiate feedstock and fuel offtake agreements for the year and get back to business.”

Kovarik added, “Domestic production of biomass-based diesel has doubled since 2020, benefitting from multiyear certainty in federal tax policy. Biodiesel and renewable diesel combined now meet 9% of U.S. demand for distillate fuel for heavy-duty transportation needs. Clean Fuels and its member companies will carefully evaluate the guidance to ensure it provides needed certainty for all stakeholders and supports the industry’s continued growth.”

American Coalition for Ethanol (ACE)

ACE is a leading coalition of ethanol producers aimed at informing consumers and elected officials about the benefits of ethanol and its impact on jobs, the economy, reducing greenhouse gases, and more. 

“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,” said ACE CEO Brian Jennings. “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,” Jennings continued. “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,” he continued. “These projects are specifically designed to address the perceived need for more empirical data on the greenhouse gas 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.”

Iowa Renewable Fuels Association (IRFA)

IRFA represents the state’s liquid renewable fuels industry and works to foster its growth. Iowa is the nation’s leader in renewable fuels production, with 42 ethanol refineries capable of producing 4.7 billion gallons annually – including 34 million gallons of annual cellulosic ethanol production capacity – and 10 biodiesel facilities with the capacity to produce 416 million gallons annually.

In a statement released Friday, IRFA described how it has “relentlessly” pushed for safe harbor guidance until a complete rule is finalized, noting that the “lack of rules is directly impacting the biodiesel supply chain today.” 

“Today’s announcement by the Treasury is a story of too little, too late,” said Monte Shaw, executive director of IRFA. “This is not a final rule. This is not a safe harbor. It isn’t even a proposed rule. Putting out a notice of ‘intent’ 10 days before you leave office is nothing but punting the rule down the road.”

Shaw went on to say that IRFA will work with the incoming Trump administration and Iowa delegation “to get rules in place as quickly as possible. 45Z is the law of the land, yet biofuels producers, farmers, and consumers are not able to utilize the credit.

“The lack of transparency and certainty has left many biodiesel production facilities running at a reduced rate or not at all,” Shaw continued. “The supply chain needs to know the value of the credits to resume functioning normally. If America is to achieve energy dominance, we can’t leave biofuels producers and American farmers stuck in neutral.” 

American Carbon Alliance (ACA)

The mission of the ACA is to form a unified voice for carbon capture pipelines, ethanol producers, landowners, farmers, construction trade workers, and citizens that embrace a new energy future for America. 

Following the release of the guidance, ACA CEO Tom Buis said, “Today’s 45Z guidance falls short of expectations and is a missed opportunity to provide the clarity that rural America was hoping for. The 45Z program holds immense potential to drive new demand in the agriculture sector, expand market opportunities, strengthen rural economies, and provide much-needed stability for farm incomes. However, the lack of critical details released today undermines the certainty the agriculture industry needs to fully capitalize on this opportunity.”

Buis added that ACA looks forward to “working with Trump Administration officials to finalize this important program, ensuring the U.S. demonstrates a true commitment to energy independence through renewable resources.”

National Oilseed Processors Association (NOPA) and American Soybean Association (ASA)

NOPA represents the seed-crushing industries for canola, soybeans, flaxseed, safflower seed, and sunflower seeds. NOPA partnered with the ASA — which represents nearly 500,000 soybean farmers and attempts to impact domestic and international policy on their behalf — for a joint statement. 

“ASA thanks the Biden administration and Treasury for listening to our concerns and developing guidance that supports U.S. farmers while strengthening our domestic biofuels industry,” said ASA President Caleb Ragland. “The guidance released today is an investment in U.S. farmers, who stand ready to feed and fuel the world—while also fueling the U.S. economy. We look forward to working with Congress and the incoming Trump administration to build on this progress and develop final guidance that supports rural America.”

The statement continued by acknowledging the restriction of import eligibility in the proposed regulations, which would positively impact the crushing industry and NOPA. “NOPA remains committed to working with the incoming Congress and Trump administration to bring full parity for soybean farmers and find long-term solutions to fully unleash the country’s energy independence, which American farmers are poised and able to provide,” the statement said.

National Sorghum Producers (NSP)

NSP represents U.S. sorghum producers and serves as the voice of the sorghum industry, coast to coast, through legislative representation, regulatory representation, and education.

Amy France, NSP chair and sorghum farmer from Scott City, Kansas, said in a statement regarding the issuance of the guidance, “While the release of this short-term guidance marks a step forward, it falls short of delivering the clarity and comprehensive framework needed to fully realize the potential of the 45Z Clean Fuel Production tax credit.

“NSP appreciates the inclusion of sorghum as a recognized feedstock in this program, reflecting its value as The Resource Conserving Crop,” she continued. “However, critical gaps remain, particularly regarding the specifics of the Greenhouse gases, Regulated Emissions, and Energy Use in Technologies (GREET) model and USDA’s guidance on climate-smart agricultural practices.

“As we await their release in the coming weeks, it is clear that much remains to be seen before the full impact of this guidance can be understood,” France said. “These details are essential to determine how helpful this program will ultimately be for producers at the farm level.

“NSP is committed to working with our partners and the incoming administration to address these gaps, refine this guidance, and deliver a final rule that meets the needs of farmers, rural communities, and the broader biofuels industry,” France said.

Iowa Corn Growers Association (ICGA)

ICGA is a 7,500-member strong grassroots-driven organization, headquartered in Johnston, Iowa, serving members across the state, and lobbying on agricultural issues on behalf of its farmer members to create opportunities for long-term Iowa corn grower profitability.

“This is disappointing news for growers,” said ICGA President Stu Swanson in a statement on Friday. “We have continually advocated for clear guidelines from Treasury officials, working to provide them with the necessary information they need to get this done. Unfortunately, it feels like our input has gone unrecognized and this issue will now be passed to the new administration.”