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Jan. 16, 2025 by Donnelle Eller, Des Moines Register Some Iowa biodiesel plants have shut down after the Biden administration failed to issue final guidance on new tax incentives for the next generation of renewable fuel, industry groups say. The Iowa Renewable Fuels Association said Tuesday that plants stopped producing the fuel after a $1-per-gallon "blenders tax credit" ended Dec. 31. A new clean fuel production tax credit, often referred to as 45Z, was supposed to replace it Jan. 1. But the U.S. Treasury Department has yet to finalize rules that determine how much producers can qualify for in tax incentives. Monte Shaw, the group's executive director, declined to say how many of the state's 10 biodiesel plants are idled. But much of Iowa and U.S. biodiesel production has either greatly slowed or stopped, given the uncertainty that the industry faces, said Grant Kimberley, the Iowa Biodiesel Board's executive director. "You don't know how to price your feedstock, how to price your final product," Kimberley said. "It's paralyzed the industry." The Treasury Department issued some 45Z guidance Friday, but Iowa and U.S. renewable fuel and farm groups criticized the Biden administration for failing to provide what they said was sufficient clarity about how the program would be implemented. On Wednesday, U.S. Agriculture Secretary Tom Vilsack said ag groups were too hasty in criticizing the administration. "Folks jumped the gun," said Vilsack, whose agency released an interim rule Wednesday that give farmers guidance about how conservation practices can reduce carbon emissions that contribute to renewable fuels' environmental footprint. Corn, soybeans, sorghum and other feedstocks are used to make ethanol, biodiesel and other renewable fuels. Farm conservation practices are key to the 45Z rulemaking, said Vilsack, a former Iowa governor. The U.S. Department of Agriculture "sent a message that agriculture has a role to play ... a very significant role" in cutting carbon emissions in biofuels, Vilsack said in his last press call with reporters as ag secretary. "Obviously, the next administration's got additional work to do, and the expectation, of course, would be that they will follow through on this." The USDA proposed guidance would enable farmers to assess, by county, how much they can reduce their carbon emissions with conservation practices like cover crops, no-till planting and inhibitors that prevent fertilizers from moving into rivers, streams and lakes, Vilsack said. Farmers using conservation practices could receive "up to $1 or more per bushel" under the interim rule, he said. Soybeans ready to harvest on the farm of Grant Kimberley, the Iowa Biodiesel Board's executive director, outside Maxwell. Vilsack said he believes the current administration's work developing the 45Z tax incentive rules is so strong that farm, renewable fuel groups and congressional members will push the Trump administration to adopt them. "This is an income opportunity for producers. This is a job-creating opportunity for rural America," he said. Shaw, the Iowa renewable fuels director, welcomed the USDA's proposed rule, saying it "could be a major step forward in unlocking the potential to reduce farm-level carbon and thereby reduce the carbon intensity for biofuels." To read the entire report click here. Tweet |
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