Farmers Upset Over Unclear 45Z Details

TL/DR –

The Department of Treasury has presented more details about a tax credit, 45Z, which aims to aid the biofuel industry tap into the aviation sector, but corn growers have expressed dissatisfaction with the lack of clarity around environmental practices required for accessing this credit. The 45Z tax credit is part of the Inflation Reduction Act, signed into law in 2022, providing tax incentives to refineries that produce biofuels to reduce greenhouse gas emissions in commercial aircraft. However, the guidelines for eligibility caused concern among growers as it mandates them to implement environmental practices that could be impractical in certain climates.

The 45Z tax credit and its impact on the biofuel industry

Today, the Department of Treasury released more information regarding the 45Z tax credit, aimed at aiding the biofuel industry’s penetration into the aviation sector. However, corn growers need further clarity on the specific environmental practices required for the credit’s accessibility.

Iowa Corn Growers Association President Stu Swanson expressed disappointment. “Despite providing necessary information to Treasury officials, it appears our input has been disregarded,” he said.

This tax credit, established by the Inflation Reduction Act of 2022, offers tax incentives to refineries producing biofuels to lower greenhouse gas emissions in commercial aircraft. However, the eligibility guidelines released by the Treasury in the previous year have troubled growers, as they require impractical environmental practices in certain climates.

Regardless, corn grower leaders have provided data-driven insights to revise these guidelines.

Read the Notice of Intent to Propose Regulations on the section 45Z Credit and annual emissions rate table for section 45Z.

-Iowa Corn Growers Association

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