Farmers struggle with clean fuel credits

Agricultural groups call for reforms in tax credit policies

By Farms.com

Four prominent U.S. agricultural organizations—the American Farm Bureau Federation, American Soybean Association, National Corn Growers Association, and National Farmers Union—have united in a plea to the U.S. government. They are pushing for critical adjustments to the Clean Fuel Production Credit, known as 45Z, and the sustainable aviation fuel (SAF) credit.

Their joint letter to the Treasury and Budget office's outlines significant barriers that current policies pose to farmers. They highlight that without a domestic feedstock requirement, the clean fuel production tax credit disproportionately benefits foreign feedstock producers, bypassing American farmers and potentially distorting market dynamics.

Moreover, they argue that the associated practices and reporting requirements for the SAF credit are too demanding and financially burdensome for many farmers.

The implementation of advanced farming techniques required under the credit's guidelines demands substantial upfront investment and ongoing compliance costs, which are unfeasible for many.

The groups are advocating for policy modifications that include establishing a domestic-only feedstock requirement for tax credits and simplifying the SAF credit requirements.

These changes would help ensure that the intended benefits of these credits—reducing carbon emissions through sustainable practices—reach American farmers, supporting them financially and promoting environmental sustainability in U.S. agriculture.