The Farmer First Fuel Incentives Act, a bipartisan bill reintroduced by lawmakers, aims to modify and extend the 45Z Clean Fuel Production Tax Credit, bolstering American biofuel production and supporting domestic farmers. This legislation restricts tax credit eligibility to renewable fuels made from domestically sourced feedstocks, extends the credit through 2034, and addresses concerns about subsidizing foreign-produced feedstocks, particularly from China.
The bill, sponsored by Representatives Tracey Mann, Marcy Kaptur and Nikki Budzinski, along with Senators Roger Marshall and Amy Klobuchar, has garnered support from various agricultural organizations. These include the National Corn Growers Association, National Sorghum Producers, Growth Energy and the National Oilseed Processors Association (NOPA).
Emily Skor, CEO of Growth Energy, welcomed the legislation, emphasizing its importance for farmer and business confidence in investing in new energy projects across rural America. Growth Energy's research suggests significant economic benefits from the proper implementation of the 45Z tax credit, including a $21.2 billion addition to the U.S. economy, $13.4 billion generation in household income, support for over 192,000 jobs, and a 10% premium price for farmers using regenerative agriculture practices.
NOPA has urged the U.S. Department of Treasury to refine the Section 45Z Clean Fuel Production Credit. Devin Mogler, NOPA President and CEO, highlighted the critical nature of this tax credit for farmers and the biofuel industry. NOPA's key policy priorities include prioritizing domestic feedstocks, removing the Indirect Land Use Change (ILUC) penalty, adapting Renewable Fuel Standard (RFS) fuel pathways, incorporating on-farm conservation practices, and clarifying technical details.
If passed, the legislation could significantly impact the biofuel industry by providing long-term incentives for domestic production, reshaping agricultural markets across the Midwest, strengthening energy independence, and supporting farmers and rural economies. The extended timeline through 2034 aims to provide the certainty needed for substantial investments in renewable fuel infrastructure and production capacity.
The Farmer First Fuel Incentives Act represents a significant effort to support domestic biofuel production and American farmers. As the industry awaits further developments, stakeholders are encouraged to stay informed about potential impacts on agricultural markets, energy production, and rural economies. This legislation underscores the importance of American-grown products in the renewable fuel sector and aims to create a more sustainable and competitive domestic biofuel industry.
