Congressman Brad Schneider (IL-10), alongside Reps. Dan Kildee (MI-08) and Julia Brownley (CA-26), introduced the Expanding Clean Fuel Production Act, which seeks to extend the Section 45Z Clean Fuel Production Credit (CFPC) by an additional ten years, pushing its expiration to 2037. The bill aims to bolster investments in clean fuel production technologies, particularly Sustainable Aviation Fuel (SAF), to help reduce greenhouse gas emissions in the transportation sector.
The current CFPC, established under the Inflation Reduction Act, is set to expire at the end of 2027. By extending the credit, the legislation would provide long-term certainty for biofuel producers, spurring continued innovation and investment in the U.S. renewable fuels sector.
Rep. Schneider emphasized the importance of this extension in driving forward the nation’s clean fuel transition. "A ten-year extension would allow for sustained investment in production to accelerate the transition to cleaner fuels, significantly cutting greenhouse gas emissions from the aviation industry," Schneider said.
The bill would also support the rural economy, encouraging investments in technologies such as carbon capture, utilization, and storage (CCUS), and promoting climate-smart agricultural practices. These incentives, when combined with biofuel production, offer new opportunities for farmers to participate in the growing market for low-carbon fuels, especially in sectors like aviation, which are harder to decarbonize.
Growth Energy, a leading biofuel trade association, applauded the introduction of the bill, noting that it would provide farmers and renewable fuel producers the confidence needed to make long-term investments. "This legislation will allow the U.S. biofuel industry to continue leading in the global next-generation fuel markets, creating jobs and fostering economic growth in rural communities," said Growth Energy CEO Emily Skor.
Tax incentives to drive emissions reduction
The CFPC plays a key role in advancing clean energy technologies by incentivizing investments in emissions-reducing practices, such as SAF production, and carbon-reducing innovations like CCUS. These technologies help biofuel producers lower their carbon intensity (CI) scores, making their products more competitive in the growing global market for sustainable fuels.
Additionally, the bill aims to ensure that U.S. tax incentives for biofuel production are administered using the Department of Energy’s GREET model, the gold standard for measuring the emissions-reducing power of farm-based biofuels. By maintaining a technology-neutral approach to carbon reduction, the extension of the CFPC will help farmers and biofuel producers maximize their participation in global markets like SAF while contributing to national carbon reduction goals.
Rep. Julia Brownley highlighted the significance of this extension in ensuring a reliable supply of SAF to meet industry demand. "This extension is essential for market certainty and will ensure that the U.S. continues to lead in clean energy innovation," Brownley said.
The bill comes at a time when U.S. biofuel exports, including ethanol, are reaching record levels, and the expansion of tax incentives could further accelerate growth in the sector, boosting both environmental benefits and economic gains.
With bipartisan support and endorsements from industry leaders like United Airlines and LanzaJet, the Expanding Clean Fuel Production Act is positioned to make a significant impact on U.S. efforts to reduce carbon emissions and foster sustainable growth in the renewable fuels sector.
