Biofuels Industry Praises ‘Much-Needed Structure’ Provided by USDA’s 45Z GREET Rules

On Wednesday, USDA published its biofuel feedstocks guidelines as an interim rule for “quantifying, reporting, and verifying the greenhouse gas (GHG) emissions associated with the production of biofuel feedstocks” in the U.S. This rule falls under the Climate-Smart Agriculture (CSA) umbrella, and gives farmers guidelines to qualify for the 45Z tax credit under the Greenhouse Gases, Regulated Emissions, and Energy use in Technologies (GREET) model. USDA said the guidelines will create “new market opportunities for biofuel feedstock producers.”

The 45Z tax credit guidelines were published on Friday by the U.S. Department of the Treasury, and were met with largely negative feedback. One of the main criticisms the interim rules received was lack of clarity over biofuel feedstocks and how they would qualify. 

“This means that participating farmers would have the flexibility to adopt the CSA practices that make sense for their operation, while still being able to produce feedstocks with reduced carbon intensities under the rule,” USDA said in a press release. 

USDA is requesting public comment on any aspect of the published rule until DATE. The fully published rule is live on regulations.gov.

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 Wednesday, RFA President and CEO Geoff Cooper said, “America’s ethanol producers applaud USDA for publishing these important guidelines, and we sincerely thank Secretary Tom Vilsack for his extraordinary vision and leadership. The entire team at USDA deserves much credit for the enormous effort and technical work that went into this process. These new guidelines begin to open the door to new value-added opportunities for farmers and renewable fuel producers.”

Cooper continued, “Today’s USDA guidelines finally create a much-needed structure for properly assessing, valuing, and integrating the carbon reduction benefits of certain farming practices into lifecycle analysis. We thank USDA for developing this initial framework that could ultimately allow farmers to actively participate in carbon markets, bringing new revenue streams and unprecedented value creation to rural communities.”

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 CEO Emily Skor said she was pleased with the USDA’s announcement. “This new CSA rule hits all the right notes and will help set American ethanol up to deliver a more affordable, low carbon, homegrown energy solution to American drivers,” Skor said. “Today’s announcement also sets the stage for new economic opportunities in rural America, as it means farmers could get credit for their work to grow more crops using fewer resources. We commend USDA and specifically Secretary Vilsack for building this rule and the agency’s new feedstock carbon intensity calculator in a way that will maximize economic benefits to farmers, putting them in a position to help America’s ethanol industry unleash American energy dominance.  

“We urge the incoming administration to use this new proposal to provide farmers with a new pathway to drive farm income,” Skor continued. “A strong rural economy depends on a strong American ethanol industry, and vice versa. This rule offers a path forward for all of these stakeholders, and we look forward to working with the Trump administration to make regenerative agriculture a part of their successful efforts to revitalize rural America.” 

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.

Kurt Kovarik, Clean Fuels vice president of federal affairs, stated, “We appreciate Treasury, USDA, and the Department of Energy issuing these long-awaited rules and models. We also thank the many members of Congress who urged the administration to publish this guidance as soon as possible. Biodiesel and renewable diesel combined are meeting 9% of U.S. demand for distillate fuel for heavy-duty transportation needs. These rules are crucial to our industry, and continued growth in the industry is essential to the agricultural sector and to U.S. energy security. We will continue to work with our members to evaluate whether today’s releases provide clean fuel producers the policy certainty they need to negotiate feedstock and fuel offtake agreements, and ultimately grow the production and market for biomass-based diesel.”

Kovarik added, “USDA’s rule could enable American farmers and biofuel producers to calculate the carbon benefits of conservation practices. We look forward to continued work with USDA, Treasury, and the Department of Energy to ensure that farmers can financially benefit by adopting these practices and cooperate with clean fuel producers to increase the value of domestically produced clean fuels.”

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.

“We commend Secretary Vilsack and the office of chief economist for taking critical steps to support farmers and biofuel producers in achieving verifiable carbon reductions through climate-smart practices,” said ACE CEO Brian Jennings. “We’re pleased to see greater flexibility for farmers, including the stacking of practices and a departure from the all-or-none bundled approach previously required under 40B. ACE looks forward to continuing our collaboration with USDA and the Treasury Department as it finalizes the 45Z Clean Fuel Production tax credit under the incoming administration, ensuring these efforts are accurately recognized and rewarded.

 “The ACE-led USDA-Natural Resource Conservation Service (NRCS) Regional Conservation Partnership Programs (RCPPs) are designed to help improve the accuracy of the GREET model, and we look forward to partnering with Argonne scientists and USDA, particularly in how climate-smart agriculture crops are calculated under GREET and USDA’s new feedstock carbon intensity tool, to ensure farmers and ethanol producers can maximize on 45Z and future programs,” he continued.

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 Wednesday, the IRFA confirmed its support for the USDA’s rule.

“The interim final rule released today by USDA could be a major step forward in unlocking the potential to reduce farm-level carbon and thereby reduce the carbon intensity for biofuels,” said IRFA Executive Director Monte Shaw. “There are several improvements from the previous CSA program, including more practices and flexibility. Just as importantly, a quick review of the new carbon calculator seems to show farmers would be given full credit for CSA practices instead of an artificially reduced number as in the previous iteration. Secretary Vilsack has once again pushed the envelope forward based on sound science and data. IRFA looks forward to digging into the proposal and providing feedback to help make it ever better.

“It is important to note that, if finalized, this CSA program could be not only adopted into federal policies like the 45Z Clean Fuel Production Tax Credit, but also into state clean fuel policies and international carbon programs as well,” Shaw added. “With the reliance on the best data and science and the imprint of the USDA, the onus going forward should not be on why a carbon program should adopt CSA, but rather on how they could possibly justify not recognizing CSA.”

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.

“We sincerely thank Secretary Vilsack and the undersecretary’s office for their tireless efforts in recognizing the role of climate-smart agricultural practices in producing low-carbon transportation fuels,” said NSP Chair Amy France, a sorghum farmer from Scott City, Kansas.

“Sorghum farmers have long been at the forefront of innovation, serving as environmental stewards while working closely with livestock and biofuel producers to navigate challenging weather cycles,” France continued. “This proposed rule acknowledges the vital contributions of climate-smart agriculture in producing low-carbon fuels for today’s vehicles and fostering rural economic growth through value-added agriculture. 

“Sorghum plays a critical role in biofuel production across the arid regions of the U.S. High Plains, providing essential feedstock rotations that enhance the resilience and durability of local production systems,” France said. NSP remains committed to advancing this effort and will provide detailed input during the comment period to ensure the rule’s successful implementation. We encourage local producers to reach out to their elected officials and emphasize the importance of finalizing this rule in Treasury guidelines to create lasting benefits for farmers and biofuel producers alike.”