U.S. Treasury blocks used cooking oil for Clean Fuel Credit
The U.S. Treasury Department’s notice of intent to propose regulation on the Clean Fuel Production Credit (45Z) has been welcomed by the American Soybean Association (ASA) and the National Oilseed Processors Association (NOPA).
This regulation provides interim guidance to taxpayers on how to claim credits while the government works to stimulate more investment in the domestic biofuel industry.
“ASA thanks the Biden administration and Treasury for listening to our concerns and developing guidance that supports U.S. farmers while strengthening our domestic biofuels industry,” said ASA President Caleb Ragland, a soy farmer from Kentucky.
“The guidance released today is an investment in U.S. farmers, who stand ready to feed and fuel the world while also fueling the U.S. economy. We look forward to working with Congress and the incoming Trump administration to build on this progress and develop final guidance that supports rural America.”
With a significant rise in imported waste feedstocks for biofuel production in recent years, ASA and NOPA have highlighted the importance of ensuring the legitimacy of these imports while supporting U.S. farmers.
The Treasury’s notice responds to this issue by confirming that used cooking oil will remain ineligible for the 45Z credit through the GREET model until regulations for imports are finalized.
NOPA has also expressed gratitude to Treasury for providing the guidance needed to support U.S. crushers and farmers, furthering the nation’s energy independence.
The association pointed out that the influx of imported used cooking oil has posed risks to American agriculture, but restricting eligibility for the 45Z credit will benefit domestic farmers and processors.
NOPA remains committed to working with Congress and the incoming administration to secure fair opportunities for soybean farmers and foster long-term energy independence in the U.S.
By September 2024, the U.S. had imported 5.4 billion pounds of used cooking oil and tallow, surpassing 2023’s record levels. The Treasury’s regulation proposal will enable taxpayers to claim credits while the rulemaking process continues.
Additional guidance on biofuel tax credits is anticipated from the U.S. Departments of Agriculture and Energy in the near future.