Senators Marshall and Klobuchar Lead Bipartisan, Bicameral Legislation Fighting for Farmers with Biofuel Tax Credit 

Washington – U.S. Senators Roger Marshall, M.D. (R-Kansas) and Amy Klobuchar (D-Minnesota) today reintroduced the bipartisan and bicameral Farmer First Fuel Incentives Act, which would protect American farmers by restricting the eligibility of the 45Z Tax Credit to renewable fuels made only from domestically sourced feedstocks. U.S. Representatives Tracey Mann (R-Kansas-01) and Marcy Kaptur (D-Ohio-09) have introduced an identical bill in the House of Representatives.

This bill would extend the 45Z tax credit and give the ethanol industry the time and financial incentive to build up the infrastructure needed for the U.S. to be less reliant on foreign fuel, open new markets for farmers, and increase ethanol production across the Midwest. Additionally, this bill fixes the glaring flaw in 45Z that negatively impacts farmers wanting to sell feedstocks to the biodiesel and renewable diesel industry. If 45Z continues as-is, taxpayers are at risk of further subsidizing Chinese-used cooking oil and undermining the use of soy, canola, sorghum, and corn oil in renewable fuels.

“The Farmer First Fuel Incentives Act is commonsense legislation that stops sending American taxpayer dollars to China, expands robust domestic markets for agriculture producers, and increases certainty for the biofuels industry,” said Senator Marshall. “With President Trump in the White House and Republicans leading both the Senate and House, we are finally putting American farmers first and supporting biofuels made in the U.S.A. It’s time our energy and agricultural policies reflect that.”

“Domestically produced biofuel strengthens our energy independence, supports our farmers, and boosts rural economies,” said Senator Klobuchar. “The introduction of the Farmer First Fuel Incentives Act is an important step as we work to maximize the potential of the 45Z Clean Fuel Production Credit and clean fuel investments across rural America. By extending the credit for another ten years, this legislation gives farmers and biofuel producers the certainty they need to provide consumers with affordable, lower-carbon fuel options.” 

“American tax incentives should benefit American-grown products and American farmers, not foreign producers,” said Representative Mann. “Foreign feedstocks can play a significant role in producing domestically manufactured ethanol, biodiesel, renewable diesel, and sustainable aviation fuel, but we cannot allow them to displace harvest grown right in our backyard. Our tax code should reward their grit and tenacity, not prop up feedstocks grown overseas.”

“Today, I joined my colleagues in this important bicameral and bipartisan effort because helping American farmers, producers, and growers goes beyond state and party lines, and is more important now than ever,” said Representative Kaptur. “We must ensure the Clean Fuel Production tax credit is structured in a way that benefits domestic producers, and not one that advantages foreign-produced feedstocks from China or Brazil. Our legislation extends this credit through 2034 and will bolster American energy independence by prioritizing American producers and the production of domestic biofuels.”

This legislation is cosponsored by U.S. Senators Joni Ernst (R-Iowa), Deb Fischer (R-Nebraska), Elissa Slotkin (D-Michigan), Tammy Baldwin (D-Wisconsin), and Pete Ricketts (R-Nebraska).  

“Throughout my time in Congress, I’ve led the charge to build certainty and clarity into biofuel policies and put Iowa farmers at the forefront of delivering better, more affordable options at the gas pump,” said Senator Ernst. “The Farmer First Fuel Incentives Act does just that by giving producers the long-term certainty they need to go all-in on increasing production of domestic biofuels. It’s critical that we fully leverage homegrown, American biofuels and ensure not a cent of taxpayer dollars fund fuel produced with foreign crops.”

“America’s biofuel producers are a key piece in helping to secure U.S. energy independence,” said Senator Fischer. “That’s why Americans’ hard-earned tax dollars should support home-grown feedstocks—not incentivize foreign competitors. Our bipartisan legislation ensures that renewable fuel tax incentives support American producers—not overseas interests.” 

“American tax credits should support American farmers. The Farmer First Fuel Incentives Act provides long-term certainty for Nebraskan producers through tax policy that makes sense,” said Senator Ricketts. “By bolstering the development of a domestic fuel supply chain, this bipartisan bill puts American farmers first.”

The legislation is supported by Growth Energy, American Soybean Association, National Oilseed Processors Association (NOPA), National Corn Growers Association, National Sorghum Producers, U.S. Canola Association, and Renewable Fuels Association.

“Farmers and businesses need to know this tax credit is here to stay before they can invest in dozens of new energy projects across rural America. With this bill they’ll have the certainty they need to accelerate innovation, create thousands of new jobs, and secure new markets for farmers and biofuel producers,” said Growth Energy CEO Emily Skor. “We applaud Sen. Marshall and Sen. Klobuchar for their leadership and thank all our rural champions for working to put American renewable fuel producers and farmers in the best possible position to succeed in next generation fuel markets.”

“ASA thanks Senators Marshall and Klobuchar for their leadership to ensure the 45Z tax credit supports domestic biofuel producers and domestic biofuel feedstock suppliers like soybean farmers,” said American Soybean Association President Caleb Ragland. “The updated Farmers First Fuel Incentives Act includes one of our top priorities: removing arbitrary indirect land use change calculations, which put soy and all of U.S. agriculture at a disadvantage to imported waste feedstocks of dubious origin. This legislation provides a roadmap for how the 45Z tax credit can be improved to support farmers, and we are glad to support its introduction.”

“American tax incentives should support American farmers — not put them at a disadvantage. Ensuring that only domestic feedstocks such as U.S.-grown soybeans qualify for U.S. tax credits is a straightforward way to strengthen our domestic supply chain and rural economy,” said National Oilseed Processors Association (NOPA) President and CEO Devin Mogler. “At the same time, eliminating the outdated and flawed Indirect Land Use Change (ILUC) penalty removes an arbitrary barrier that unfairly punishes U.S. producers while benefiting foreign competitors. We appreciate Senators Marshall and Klobuchar for their leadership to ensure the Clean Fuel Production Credit works as intended — to support American agriculture and American energy.”

“We are deeply appreciative of these leaders for introducing legislation that establishes requirements for a tax credit that will level the playing field for America’s corn growers,” said National Corn Growers Association President Kenneth Hartman Jr. “This bill brings American farmers a step closer to unlocking an exciting new market with global reach.”

“We appreciate the focus on “farmers first” legislation and the support of 45Z and domestic feedstocks like sorghum,” said Amy France, Chair of the National Sorghum Producers. “Domestic biofuel production remains critical to our farm and our country’s success.”

“The U.S. Canola Association strongly supports the removal of arbitrary and uncertain indirect land use change (ILUC) assumptions from the calculation of federal clean fuel production tax credits,” said Tim Mickelson, President of the U.S. Canola Association. “We applaud Senator Marshall, Senator Klobuchar and the co-sponsors for their efforts to improve and extend the tax credit for biofuels. The flawed assumptions used to calculate indirect emissions have resulted in canola being excluded despite being a proven feedstock that the U.S. EPA’s analysis conservatively shows reduces emissions up to 78%.  We urge Congress to enact these important changes to provide certainty, stability, and market opportunity for canola growers and our biofuels industry partners.” 

Click HERE to read the full bill text.

Background:

• Senator Marshall initially introduced this legislation in 2024.
• In 2024, Senator Marshall also led a bipartisan letter calling for the U.S. Department of the Treasury to restrict the eligibility of the 45Z Tax Credit to renewable fuels made only from domestically sourced feedstocks, like Kansas soybean oil and corn oil.

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