MCGA disappointed in 45Z announcement
Last Friday, the U.S. Department of the Treasury issued a notice of intent to propose rulemaking on the Section 45Z Clean Fuel Production Credit. The issuance follows consistent and lengthy delays that created uncertainty for producers, blenders, retailers, and consumers ahead of the Jan. 1, 2025, 45Z credit start date. Currently, the 45Z credit is set to expire December 31, 2027. The continued delays and lack of clarity jeopardize the usability of the tax credit.
The Minnesota Corn Growers Association (MCGA) remains disappointed in the delayed 45Z guideline issuance. The organization is also disappointed that the Treasury Department declined to provide direction on including Climate Smart Agriculture (CSA)for the credit , after including them—albeit in an unworkable way— in the 40B blenders credit guidelines. The lack of CSA practices in the 45Z guidelines reduces opportunities for U.S. farmers to take advantage of on-farm innovations and develop market opportunities for corn and biofuels. USDA has also been developing CSA guidance, and it is uncertain when or if the draft guidance will be announced given the administration transition.
In a statement, MCGA President Jim Kanten said MCGA hopes to work with the Trump administration to improve the 45Z guidelines. He said the organization is committed to maximizing the credit’s ability to grow domestic energy security while increasing revenue streams and value-added opportunities for farmers and rural communities.
“The 45Z credit represents a significant opportunity to bolster efforts by Minnesota’s farmers and biofuel producers to grow and manufacture renewable fuels,” Kanten said. “We look forward to working with members of Congress and the incoming Trump administration to ensure 45Z stimulates the development of a domestic fuel supply chain that supports American energy independence by incentivizing production of homegrown biofuels.”
Throughout 2024, MCGA worked with the administration and members of Congress from both political parties to ensure the 45Z guidelines are workable for U.S. corn farmers. For example, MCGA and the Minnesota Bio-Fuels Association responded this past fall to a Request for Information on 45Z by majority members of the U.S. House Ways & Means Committee. The organizations noted the critical role of biofuels in ensuring domestic energy security and increasing opportunities for biofuel producers and farmers. They also urged the use of accurate, technology-neutral modeling for calculating the carbon intensity (CI) scores of biofuel feedstocks.
Independent assessments from qualified third parties show the significant strides farmers have made in reducing feedstock CI intensity. For example, in 2022 and 2023, Minnesota Corn partnered with Eocene Environmental Group to evaluate the soil, water and carbon impacts of the crop production practices of our board of directors. About 37,000 acres were assessed in 2022, and 39,000 were assessed in 2023. Eocene also ran the 2023 data through the GREET feedstock CI calculator. The analysis found that for corn acres in the assessment, the feedstock practices reduced the carbon intensity by 31% compared to the GREET U.S. average values in the model.
Learn more about how Minnesota Corn is developing markets for sustainable aviation fuel at mncorn.org.
