Rep. Randy Feenstra, R-Iowa, and five of his colleagues on the U.S. House Ways and Means Committee on Nov. 18 announced they are seeking additional information from relevant stakeholders on biofuel tax policy. Reponses must be submitted by Dec. 13. 

The request for information (RFI) pertains biofuel tax credits extended and created by the Inflation Reduction Act of 2022. That law extended the existing 40A $1 per gallon biodiesel tax credit through the end of 2024. It also created the 40B sustainable aviation fuel (SAF) tax credit and the 45Z clean fuel production credit.

Within the RFI, the lawmakers note that stakeholders have expressed concerns with many aspects of IRA’s credits. This includes a failure to consider American agriculture producers by requiring fuels to be made of domestically produced feedstocks; slow implementation of the credits; insufficient flexibility for farmers; disparity in credit value between aviation and non-aviation fuels, which many create market and supply chain distortion; delays in implementing 45Z regulations, which has created particular uncertainty for the biodiesel industry; and uncertainty created by the scheduled expiration of the 45Z tax credit after only three years. 

The RFI seeks comments from relevant stakeholders on several specific issues, including whether the 45Z credit should continue to be the basis for providing a biofuels tax credit after 2027 and what stakeholders believe success would look like for the credit. Given the delay in publishing guidance for the 45Z credit, the RFI also asks stakeholders to comment on the risks and benefits of making immediate modifications to the 45Z tax credit, which could cause more significant delays. 

In addition, the RFI seeks input on several aspects of credit eligibility. This includes comments on additional climate smart agriculture practices that should be allowed, and how new and emerging agriculture products or practices should be considered for eligibility. 

There has been a significant push from certain groups to limit the 45Z tax credit to fuels produced using domestically produced feedstocks. The RFI seeks input on the risks and benefits of limiting eligibility for the 45Z credit in this way, but also seeks comments on a wider range of more nuanced approaches, such as requiring foreign feedstocks to obtain a higher standard of verification; limiting feedstocks to domestic with the exception of certain trade partners; allowing foreign feedstock to participate in and benefit from 45Z, but at a lower credit amount; modifying how indirect land use change is considered for the purposes of determining the carbon intensity (CI) score of a feedstock producer; and utilizing direct land use change. In general, the RFI also asks stakeholder what modifications should be included in the 45Z credit to ensure that U.S. farmers can benefit and what forms of fuel or transportation modes are currently excluded from 45Z but should be considered for inclusion. 

The lawmakers are also seeking input specifically from the airline industry regarding domestic and international market factors. Airlines are asked to comment on what potential SAF that meets GREET standards, but not CORSIA standards, has for utilization on international flights; whether SAF that is GREET compliant but not CORSIA compliant would be restricted to domestic utilization and how feasible such a restriction would be in the marketplace; and whether the supply of CORSIA compliant SAF could meet anticipated demand for SAF in 2030 and 2050. 

In addition to Feenstra, the RFI was issued by Reps. Adrian Smith, R-Neb.; Michelle Fischbach, R-Minn.; Darin LaHood, R-Ill.; Carol D. Miller, R-W.V.; and Claudia Tenney, R-N.Y. The RFI includes a link to a form where stakeholders can weigh in on these issues. Additional information is available on Feenstra’s website.