Biofuel groups urge flexibility in 45Z CSA requirements
October 15, 2024
BY Erin Voegele
The USDA on Oct. 15 held a third virtual listening session as part of its public consultation on climate-smart agriculture for biofuel feedstocks. During the event, representatives of the U.S. biofuel sector advocated for flexibility in climate smart agriculture (CSA) requirements for the 45Z Clean Fuels Production Credit.
The USDA on June 26 launched a request for information (RFI) seeking public comments on procedures for quantifying, reporting and verifying the effect of climate-smart farming practices on the greenhouse gas (GHG) emissions associated with U.S.-grown biofuel feedstocks. Although not specific to the 45Z tax credit, the RFI is expected to help inform development of the climate smart ag components of GHG modeling currently under development for the tax credit.
In addition to accepting written comments as part of the RFI, the USDA also hosted three virtual listening sessions, including those held on Oct. 1, Oct. 8 and Oct. 15.
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The American Coalition for Ethanol and Growth Energy were among the groups to provide comments during the Oct. 15 event.
In his comments, ACE CEO Brian Jennings encouraged USDA to continue engaging with the U.S. Treasury Department and leverage ACE’s Regional Conservation Partnership Program projects to help inform more accurate and updated GHG credit values for CSA practices.
“ACE is proud to partner with USDA on two Regional Conservation Partnership Program (RCPP) projects to improve upon model-generated credit values for biofuel feedstocks produced with climate-smart ag (CSA) practices,” said Jennings during his comments.
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Within his comments, Jennings stressed that models and credit values for CSA practices should be routinely updated. He also said 45Z should allow individual CSA practices and stacking of agricultural practices rather than requiring an all-or-none bundled approach or arbitrarily caping agriculture practice GHG credit values. In addition, Jennings noted that the USDA has a long track record of stewarding federal taxpayer funds for commodity and conservation programs and said the agency’s protocols are sufficient for verifying the same practices for federal tax incentives, including the 45Z credit.
Growth Energy General Counsel Joe Kakesh also participated in the listening session, stressing the importance of giving farmers flexibility when it comes to implementing and incentivizing practices that can lower the carbon intensity (CI) of renewable fuel production, including CSA.
During his comments, Kakesh called on USDA, Treasury and the U.S. EPA to give farmers and renewable fuel producers credit for every CI-reducing technology they implement at the plant and on the farm, specifically when administering the 45Z credit.
“Robust decarbonization cannot be achieved unless the full range of CI-reduction technologies – both on-farm and at the plant – is recognized, and unless farmers and biofuel producers are provided the flexibility to implement CI-reduction technologies that reflect current practices and spur future innovation,” Kakesh said. “45Z provides an opportunity to do this. We urge USDA, Treasury, EPA, and other agencies working on Section 45Z guidance to expand options to realize the full CI-reduction potential of biofuels under Section 45Z, and to provide guidance before January 1, 2025, to allow stakeholders to take full advantage of the credit from day one.”
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