Rep. Miller-Meeks Introduces Legislation to Extend Biofuel Tax Credit, Lower Energy Cost
Washington DC – U.S. Representatives Mariannette Miller-Meeks (IA-01) and Sharice Davids (KS-03) introduced legislation to extend the Second-Generation Biofuel Producer Tax Credit, which will protect biofuels production in the Midwest and across the country.
“Iowa’s biofuels production fuels the country and powers our economy,” said Rep. Miller -Meeks. “Iowa producers need market certainty to continue producing affordable, low-emissions forms of energy. I am thankful for Rep. David's collaboration on this commonsense, bipartisan bill which will lower energy costs and promote the production of biofuels right here in the Midwest, and I look forward to seeing this bill progress through the legislative process.”
"Federal incentives for biofuels are only good enough if our farmers and producers have certainty.” Said Rep. Sharice Davids. I’ve consistently urged the Biden administration to publish new rules for biofuel producers to take advantage of what Congress has passed into law, and I’ll continue to push for the guidance to be finalized. In the meantime, I’m proud to work across the aisle with Rep. Miller-Meeks to ensure stability in the biofuels market and keep costs low for Kansans.”
“Cellulosic biofuel producers have been anxiously awaiting guidance from the Treasury Department on the new 45Z clean fuel producer tax credit that is supposed to take effect just two months from now. But with 2025 just around the corner, Treasury has not yet proposed regulations to implement the 45Z credit and there is no clarity on the timeline or path forward.” Said Geoff Cooper, President and CEO, Renewable Fuels Association. “By extending the existing tax credit for second-generation biofuels by one year, this legislation provides marketplace certainty and allows for a smooth transition to the new tax credit regime. We applaud Reps. Miller-Meeks and Davids for taking bipartisan action to protect the market for cellulosic ethanol made from grain fiber, which is the lowest-cost, lowest-carbon liquid fuel available in the marketplace today.”
Background:
Certain second-generation biofuels producers who are registered with the IRS and meet the environmental standards set by the U.S. Environmental Protection Agency may be eligible for up to $1.01 per gallon tax credit for the fuel produced. The second-generation biofuel producer tax credit is set to expire at the end of 2024.
The 45Z clean fuel production credit is a “technology-neutral” credit set to take effect in 2025. However, without issued guidance from the Treasury Department on eligibility requirements for claiming the credit, biofuels producers are lacking the market certainty they need to make critical investments. This one-year extension of the tax credit better bridges the gap between the current credit’s sunset date and the implementation of 45Z by creating a longer off-ramp and affording producers the flexibility needed to get the maximum value of the credit.
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