The Internal Revenue Service this week released guidance for farmers seeking clarity on the future of the 45Z Clean Fuel Production Tax Credit, which was designed to incentivize production of aviation fuel and other clean fuels.
The guidance, issued in conjunction with an updated Department of Energy GREET Model released Tuesday, provides a safe harbor for previously recognized on-farm practices used to reduce the carbon intensity of qualifying fuels.
The National Corn Growers Association welcomed the guidance. NCGA President Jed Bower, an Ohio corn grower, said the organization was pleased to see the agencies reaffirm actions taken earlier this year that recognized existing regenerative farming practices.
The guidance also codifies changes to the credit related to indirect land use change. NCGA said it plans to work with the Treasury Department this fall as the agency develops a final rule expected by November.
NCGA also is seeking recognition of book-and-claim as a viable chain-of-custody methodology in the final rule.
Book-and-claim allows farmers to sell the environmental value of low-carbon corn directly to biofuel producers through a digital system, eliminating the need to physically segregate and transport the crops to a specific facility.
Source: National Corn Growers Association, "Corn Growers Thank Trump Administration for Crucial Next Steps in 45Z Implementation"