Sen. Roger Marshall, R-Kan., on Sept. 24 introduced the Farmer First Fuel Incentives Act, a bill that aims to extend the 45Z Clean Fuel Production Credit for a full 10 years and restrict the credit to fuels made from domestically produced feedstock. Companion legislation was introduced by Rep. Tracey Mann, R-Kan. 

The 45Z tax credit, established by the Inflation Reduction Act of 2022, provides a tax credit for the production and sale of low-emission transformation fuels. The credit starts at 20 cents per gallon for non-aviation fuels and 35 cents per gallon for sustainable aviation fuel (SAF). For facilities that satisfy the prevailing wage and apprenticeship requirements, the value of the tax credit is up to $1 per gallon for non-aviation fuels and $1.75 per gallon for SAF. The tax credit is currently in place for 2025, 2026 and 2027. 

The Farm First Fuel Incentives Act aims to extend the credit for an additional seven years, through the end of 2034. The legislation also aims to add language to 45Z regulations requiring eligible low-carbon fuels to be derived from feedstock that was produced or grown in the U.S. 

“It’s very tough in farm country with high interest rates and low commodity prices, which is exactly why we can’t have a tax policy that will lower commodity prices even more. While we support free trade and open markets, we do not believe foreign feedstocks should be incentivized through the hard-earned dollars of U.S. taxpayers to the detriment of American farmers,” Marshall said. “This legislation puts farmers FIRST to ensure they are the primary beneficiaries of renewable fuel tax incentives and provides businesses a decade of certainty.”

“In no world should American tax incentives benefit foreign producers,” Mann said. “While the use of foreign feedstocks can play an important role in producing domestically manufactured ethanol, biodiesel, renewable diesel, and sustainable aviation fuel, we must not displace harvest in America. Our legislation puts American farmers first by ensuring that American tax credits are incentivizing American-grown products.”

To date, Sens. Sherrod Brown, D-Ohio; Pete Rickets, R-Neb.; Amy Klobuchar, D-Minn.; Debi Fischer, R-Neb.; Tammy Baldwin, D-Wisc.; and Tina Smith, D-Minn, have signed on to cosponsor the Senate Bill. Cosponsors of the House bill include Marcy Kaptur, D-Ohio; James Comer, R-Ky.; Nikki Budzinski, D-Ill; Don Bacon, R-Neb. 

The Farmer First Fuel Incentives Act is supported by Growth Energy, National Oilseed Processors Association, National Corn Growers Association, American Soybean Association, Ohio Corn and Wheat Growers Association, Ohio Soybean Association, Kansas Corn Growers Association, Kansas Soybean Association, Kentucky Soybean Association, Scoular, and Louis Dreyfus Company. 

Growth Energy on Sept. 24 issued a statement welcoming the bipartisan push for a 45Z extension. “This important bill sends a strong signal that the 45Z extension is going to be a top, bipartisan priority in this Congress and the next,” said Emily Skor, CEO of Growth Energy. “We applaud Senators Brown, Marshall, and all our rural champions for working to give biofuel producers and our farm partners the long-term certainty we need to accelerate innovation in America’s bioeconomy.

“With a longer runway from Congress, and clear, flexible, and timely guidance from the U.S. Department of the Treasury, we’ll have the pieces in place to unlock billions of dollars in new clean energy investments across rural America,” she added. 

A full copy of the bill is available on Marshall’s website.