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U.S. Soybean Groups Call for Tax Credit on Domestic Feedstocks Only
U.S. Soybean Groups Call for Tax Credit on Domestic Feedstocks Only

U.S. Soybean Groups Call for Tax Credit on Domestic Feedstocks Only

  • 11-Sep-2024 3:13 PM
  • Journalist: Shiba Teramoto

According to the several media reports, U.S. soybean associations have rallied behind a proposed guidance that seeks to limit a clean fuel tax credit to renewable fuels made exclusively from domestically sourced feedstocks. This push from the National Oilseed Processors Association (NOPA) and the American Soybean Association (ASA) underscores a significant move towards enhancing American energy independence and supporting local agriculture.

The House of Representatives recently urged the Treasury Department to incorporate this guidance into the Section 45Z Clean Fuel Production Tax Credit, which is designed to incentivize the production of renewable fuels. The Treasury Department is required to issue guidance for Section 45Z by January 1, 2025, and lawmakers have also called for an expedited process to ensure timely implementation.

The representatives believe that aligning the guidance with congressional intent will bolster U.S. energy security by promoting biofuels derived from domestic feedstocks. While acknowledging the role of foreign feedstocks in the production of various renewable fuels such as ethanol, biodiesel, renewable diesel, and sustainable aviation fuel, the lawmakers stressed that Section 45Z should be restricted to biofuels produced from U.S. feedstocks by domestic producers. This restriction is seen as crucial for maximizing the benefits of the tax credit and ensuring that it supports American farmers and the U.S. economy.

Kailee Tkacz Buller, president and CEO of NOPA, highlighted the potential negative impact of not limiting Section 45Z to domestic feedstocks. She argued that failing to do so would incentivize the continued use of foreign feedstocks, undermining the efforts of American farmers and the domestic biofuel industry. Buller emphasized that providing opportunities for U.S. producers could lead to significant advancements in reducing greenhouse gas emissions while simultaneously boosting the U.S. economy and enhancing energy independence.

Josh Gackle, president of ASA and a soybean farmer from North Dakota, echoed these sentiments. He pointed out that investing in U.S. farmers is essential for developing a robust domestic biofuels market. “If we want to build a strong U.S. biofuels sector, we must prioritize investments in American farmers,” Gackle asserted. He added that the guidance should align with the goal of fostering a sustainable and self-reliant biofuel industry in the U.S.

The support from soybean associations reflects a broader commitment to promoting domestic agricultural products and reducing reliance on foreign sources. By advocating for a tax credit that favors U.S. feedstocks, these organizations aim to strengthen the local biofuel industry and contribute to national energy and environmental goals.

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