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Clean fuel tax credit guidance delayed

Dec 04, 2024
By Farms.com

45Z Guidance may not be finalized before new administration

The Clean Fuel Production tax credit, known as the 45Z credit, is facing delays in final guidance, leaving biofuel producers in limbo.

According to reports, the current Administration may not finalize these guidelines before January 20, 2025. This delay affects renewable diesel and biodiesel producers, who were relying on the credit after the blender’s tax credit expires this December.

Paul Winters, director of public affairs at the Clean Fuels Alliance America, highlighted the industry’s concerns -

“We spent the entire year urging Treasury to issue guidance by September because the biodiesel and renewable diesel industry is trying to navigate the change from the blender excise tax credit to the producer income tax credit. Our industry is already feeling the impact of the delays and uncertainty.”

Biofuel producers are eligible for the credit only from the date of their registration letter, adding another layer of complexity. Many have reduced production or even shut down plants due to the lack of clarity.

Geoff Cooper, president of the Renewable Fuels Association, remains hopeful for interim guidance -

“While we agree that final regulations for 45Z seem highly unlikely before Jan. 20, we remain hopeful that the Administration will at least issue some sort of guidance or safe harbour before Jan. 1.”

Industry leaders warn of broader economic impacts on rural communities and agriculture partners who invested in carbon-reduction technologies.

Growth Energy CEO Emily Skor shared her concerns - “To leave the credit unfinished would jeopardize the economic benefits this credit could deliver to America’s rural communities.”

Stakeholders continue to push for swift action, emphasizing that delays disrupt middle America’s economic progress.


Trending Video

Will the 2025 USDA December Crop Report Be a Market Mover/Surprise?

Video: Will the 2025 USDA December Crop Report Be a Market Mover/Surprise?


Historically, the USDA December crop report is a non-event or another dud report as the USDA reserves any final supply changes to the final report in January of the following year in this case 2026. But after the longest U.S. government shutdown in history at 43 days and no October crop report will they provide more data/surprise and make an exception?
Our China U.S. soybean purchase tracker is now at 26.6% or a total of 3.2 mmt but for traders it’s taking too long to unfold.
The final Stats Canada production report was bearish canola and wheat projection a record crop in both (it adds to the global glut of supplies) and bullish local corn and soybean prices in Ontario/Quebec thanks to a drought. It will not help the fund flow short-term, the USDA may need to offset it?
A U.S. Fed interest rate cut of another 25-basis point next Wednesday (probability 87.1%) could help fund flow and sentiment in stock and ag commodities into year end.
More inflows into Bitcoin this past week saw prices rebound back above 90,000 with support at 82,000 and resistance at 96,000.
A V-shaped bottom in cattle suggest the lows are in after Mexico reported another new world screwworm case. Lower weights, seasonal demand and higher U.S. beef select/choice values with a continued closure of the Mexican border to cattle will result in a resumption of higher cattle futures into yearend.
Australia is expected to produce its 3rd largest wheat crop ever at 36 mmt adding to the global glut of supplies.
Reports of ASF in hogs in Spain the largest pork exporter in Europe could see the U.S. win more pork export business long-term.
If the rains verify into next week of 3-5 inches for Brazil it would go a long way to fixing the dry regions from the last 2-months, but the European weather model has been wrong for the past 2-months!
Natural gas futures are surging to the 3rd price count as frigid hold temps set in.
CDN $ is also surging to end the week on a very resilient economy and better employment numbers suggesting no interest rate cuts next week.
Finally, the CFTC report showed funds were net buyers of soybeans but sellers of corn, canola and wheat. In real time the funds have gone back to selling as they take some profits.