WASHINGTON, D.C. –  Four national farm groups are requesting U.S. Treasury Secretary Janet Yellen and U.S. Office of Management and Budget Director Shalanda Young ensure the Clean Fuel Production Credit, which the groups said is out of reach for many U.S. farmers.

“As farmers, we are growing the feedstocks necessary for clean fuel production, such as corn, soybeans and other biomass,” the American Farm Bureau Federation (AFBF), the American Soybean Association, the National Corn Growers Association and National Farmers Union (NFU) said in a July 17 letter to Yellen and Young.

According to the U.S. Department of Energy, beginning Jan. 1, 2025, through Dec. 31, 2027, the Treasury Department will offer tax credits for the production and sale of low-emission transportation fuels, including sustainable aviation fuel; the tax credit amount is $0.20 per gallon for non-aviation fuel, and $0.35 per gallon for sustainable aviation fuel.

“The 45Z tax credit has the potential to be a game-changer for our industry, offering a valuable incentive for the production and use of biofuels that will lower carbon emissions,” the letter said. “However, without clear, domestic feedstock requirements, the benefits of this policy are at risk of being diverted from American farmers.”

Currently, there is no requirement that feedstocks be grown domestically, which means foreign feedstock producers can take advantage of the clean fuel production credit, the groups told Yellen and Young, adding, “This goes against the broader goal of supporting U.S. agriculture and rural communities, and will lead to market distortions.

“The implementation of no-till farming, cover cropping and enhanced efficiency fertilizers requires significant upfront investments in both time and resources,” the groups said. “Without a greater incentive, many farmers may simply be unable to implement these bundled practices based on economic limitations alone.”

The groups are asking Yellen and Young to create a domestic feedstock requirement for the clean fuel production tax credit and to broaden eligibility for the sustainable aviation fuel credit, while addressing the unworkable paperwork requirement.

“Moreover, even if geography allows farmers to comply with the CSA (climate-smart agriculture) requirements, the cumbersome reporting requirements will dissuade even the most sophisticated farming businesses from participating,” the groups added. “Additional options for compliance must be considered that would give farmers the ability to comply with CSA requirements without running afoul of the Internal Revenue Service.”

Rob Larew, NFU president, told Farm World, “Sustainable aviation fuel and clean fuel production tax credits could help farmers, and reduce America’s carbon emissions, but current provisions may limit these benefits for many U.S. farmers.

“We grow feedstocks like corn, soybeans, and other biomass needed for clean fuel,” he said. “The 45Z tax credit could be transformative for our industry by encouraging biofuel production and lowering emissions. However, without domestic feedstock requirements, these benefits may not reach American farmers.”

He said without better incentives, many farmers can’t afford these practices: “Additionally, complex reporting requirements discourage participation. We ask the administration to ensure the clean fuel production tax credit includes domestic feedstock requirements, and to simplify the sustainable aviation fuel credit to make it more accessible.”

Joe Gilson, AFBF director of government affairs, told Farm World, “Farm bureau and three other organizations emphasized the need to make changes to the 45Z tax credit to ensure benefits are accessible to farmers in the United States. We hope the administration seriously considers the concerns of farmers as the 45Z guidance is developed. It has the potential to provide a significant boost to corn and soybean farmers.

“As with any rule, drafting and implementing takes time,” he added. “If the administration reaches out, we are ready to work with them to ensure domestically grown feedstocks are a requirement to participate in the 45Z provision, which will promote the broader goal of supporting U.S. agriculture and rural communities.”