US proposes rule for Clean Fuel Tax Credit

The U.S. Treasury Department released a proposed rule on Tuesday governing the way?biofuel manufacturers can access a tax credit of $1 per gallon for?low carbon transportation fuels including aviation fuel.

The rule was welcomed by trade groups for biofuels, who said it would provide greater certainty to producers of biodiesel, ethanol and other products that are seeking credit. The 45Z program was created under the Inflation Reduction Act of former president Joe Biden and amended by President Donald Trump last year with his One Big Beautiful Bill. The program was amended last year to allow for low-carbon fuels produced from feedstocks grown by Canada and Mexico, as well as tweaks in the methodology used to calculate a feedstock's?land use intensity.

Geoff Cooper is the president and CEO of the Renewable Fuels Association. He said, "Today's proposed 45Z rule is a positive step towards providing clarity and certainty to ethanol producers."

Some questions remain unanswered about the program, including the composition of a revised model of climate that could have an impact on fuel eligibility, and the implementation foreign feedstock restrictions.

Soy farmers also welcomed the new rule.

Scott Metzger is the president of the American Soybean Association. He said, "The ASA has a priority to update federal 'biofuel policies' in order to give soy-based fuels priority. We applaud Treasury on this initiative, which will help grow domestic markets for U.S. beans." (Written by Richard Valdmanis, edited by Mark Porter).

(source: Reuters)