GOP member proposes 45Z clean fuel credit repeal
TL/DR –
US representative Beth Van Duyne, a Republican from Texas, has introduced a bill aimed at repealing the 2022 climate law’s “45Z” incentive for clean fuels, which provides subsidies to fuels based on their greenhouse gas emissions. The bill would apply retroactively, eliminating the credit from the tax code after 2024. The proposal has been referred to the House Ways and Means Committee, where other Republicans have shown interest in updating rather than eliminating the credit.
Republican Lawmaker Introduces Bill to Repeal Clean Fuel Subsidy
A GOP legislator discreetly proposed a bill, HR 549, to revoke a primary incentive for low-emission fuels, stirring up discussions among policymakers regarding clean energy incentives provided by the Inflation Reduction Act.
Introduced by US Representative Beth Van Duyne (R-Texas), the bill targets the “45Z” provision which offers escalating subsidies to clean fuel producers for lower greenhouse gas emissions. As it stands, the bill seeks to retroactively remove the credit from the tax code post-2024.
This move unfolds as Republicans aim to pass significant legislation through the reconciliation process in the Senate, enabling the bypass of the 60-vote requirement. Lawmakers, keen to extend tax cuts initiated under President Trump’s era while minimizing budget deficits, are exploring avenues to reduce government expenditure.
Debate over Clean Energy Subsidies Continues
Modifications to the Inflation Reduction Act are anticipated, with biofuels policy viewed as a less probable target for Republicans than other climate strategies. However, the new bill implies that a comprehensive repeal of the 45Z incentive might be on this year’s agenda, despite potential resistance to retroactive repeals even among those in favor of removal.
The bill awaits deliberation by the House Ways and Means Committee, of which Van Duyne is a member.
Opinions Divided on Future of 45Z Incentive
Several Republicans on the Ways and Means Committee have signaled a willingness to revise, albeit not necessarily eliminate the credit. Last year, six members sought additional inputs on options such as limiting foreign feedstocks or encouraging more “climate-smart” farming methods. Industry groups, usually in favor of 45Z, may even endorse legislative alterations due to uncertainty over qualifying for the credit.
Further information on the GOP’s strategies might be revealed soon as House Republicans meet with Trump in Florida for a policy retreat.
Despite proposed changes, the narrow Republican majority leaves limited wiggle room for disagreement, potentially allowing agricultural-state lawmakers to ensure the survival of some form of biofuel tax credit during legislative discussions.
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