Sens. Marshall, Brown, and Reps. Mann, Kaptur Lead Bipartisan Legislation Fighting For Farmers with Biofuel Tax Credit

Washington, D.C. – U.S. Senator Roger Marshall, M.D. introduced the bicameral and bipartisan Farmer First Fuel Incentives Act requiring the Treasury Department to restrict the eligibility of the 45Z Tax Credit to renewable fuels made only from domestically sourced feedstocks and extending the tax credit to make it a full ten-year credit.  This bill is co-led with Senator Sherrod Brown (D-OH) with companion legislation introduced by Representatives Mann (R-KS-01) and Kaptur (D-OH-09) in the House of Representatives. Senator Pete Ricketts (R-NE), Amy Klobuchar (D-MN), Deb Fischer (R-NE), Tammy Baldwin (D-WI), and Tina Smith (D-MN) also cosponsored the legislation. 

The 10-year credit will 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. However, we recently learned that 45Z has a glaring flaw that needs to be fixed for farmers wanting to sell feedstocks to the biodiesel and renewable diesel industry. If 45Z goes into effect as is, taxpayers will be massively subsidizing Chinese used cooking oil and would all but eliminate the use of homegrown soy or corn oil in renewable diesel.

“It’s very tough in farm country with high interest rates and low commodity prices, which is exactly why we can’t have a tax policy that will lower commodity prices even more. While we support free trade and open markets, we do not believe foreign feedstocks should be incentivized through the hard-earned dollars of U.S. taxpayers to the detriment of American farmers,” said Senator Roger Marshall, M.D. (R-KS). “This legislation puts farmers FIRST to ensure they are the primary beneficiaries of renewable fuel tax incentives and provides businesses a decade of certainty.”

“American tax dollars should support American farmers – not imported feedstocks. To continue to grow the biofuels industry and open new markets for Ohio farmers, we must stop taxpayer money from subsidizing a surge in Chinese cooking oil or any other foreign feedstock from infiltrating the American market. Our bipartisan bill ensures these investments benefit Ohio farmers and Ohio energy producers.” Senator Sherrod Brown (D-OH) said.

“In no world should American tax incentives benefit foreign producers,” said Congressman Tracey Mann (R-KS-01). “While the use of foreign feedstocks can play an important role in producing domestically manufactured ethanol, biodiesel, renewable diesel, and sustainable aviation fuel, we must not displace harvest in America. Our legislation puts American farmers first by ensuring that American tax credits are incentivizing American-grown products.”

“I joined my colleagues in this important bicameral and bipartisan effort because helping American farmers, producers, and growers goes beyond state and party lines,” said Congresswoman Marcy Kaptur (OH-09), senior member of the House Appropriations Subcommittee on Agriculture.” 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 will extend this credit through 2034 and bolster American energy independence by prioritizing American producers and the production of domestic biofuels.”

“U.S. soybean farmers have been at the forefront of our domestic clean-energy production through the booming biodiesel and renewable diesel industry over the last decade. The Farmer First Fuel Incentives Act ensures our Kansas soybean growers maintain access to this vital market sector going forward and strengthens the clean fuel production credit for the future,” Kaleb Little, Kansas Soybean Association CEO, said. 

“We appreciate the efforts of Senator Marshall and his colleagues on this bill to ensure imported feedstocks do not receive tax credits funded by American taxpayers in the 45Z program for Sustainable Aviation Fuel. Companies have a right to import feedstocks from foreign countries, but those foreign producers should not receive tax credits funded by U.S. taxpayers,” said Kansas Corn Growers Association CEO Josh Roe.

“Ensuring American farmers reach maximum profitability and build resiliency to pass down their farms to the next generation should be our top priority,” said Adam York, Kansas Sorghum Producers CEO. “This legislation helps make sure the intended benefits of this program arrive into our rural economies.”

“NOPA commends this bipartisan, bicameral legislative effort which puts U.S fuel producers, U.S. crushers and U.S. farmers first. We thank Senators Brown and Marshall and Representatives Mann and Kaptur for their leadership,” said NOPA President and CEO Kailee Tkacz Buller. “We support free trade and open markets but do not believe foreign feedstocks should benefit on the backs of U.S. taxpayers to the detriment of U.S. farmers. Without this fix, the 45Z credit will incentivize the use of foreign feedstocks over those grown by U.S. farmers. Our industry has made significant investments to expand U.S. crush capacity by 30 percent and this fix is pivotal to ensuring these investments are delivered.”

“Corn growers are making every effort to help the airline industry lower its greenhouse gas emissions through the use of corn ethanol,” said Minnesota farmer and NCGA president Harold Wolle. “We are deeply appreciative of these leaders for introducing legislation that establishes requirements for the tax credit that will level the playing field for America’s corn growers.”

“Biofuel production paves a key path for our country to be a clean energy leader, and U.S. farmers who grow the crops going into those biofuels take pride in helping reduce greenhouse gas emissions while supporting the U.S. economy and energy independence,” said ASA President Josh Gackle, a North Dakota soybean farmer. “However, for continued growth of America’s promising biofuels industry, U.S. farmers need the support of a final 45Z rule that prioritizes domestically sourced feedstock.”

“The Farmer First Fuel Incentive Act recognizes the vital role of American agriculture in 45Z. This legislation ensures that the guidance is designed and implemented in a farmer-focused manner, supporting domestic clean energy production and stimulating economic growth across rural America,” Craig Meeker, Chairman of National Sorghum Producers, said.

“This important bill sends a strong signal that extending the 45Z credit is going to be a top, bipartisan priority in this Congress and the next,” said Growth Energy CEO Emily Skor. “We applaud Senators Brown, Marshall, and all our rural champions for working to give biofuel producers and our farm partners the long-term certainty we need to accelerate innovation in America’s bioeconomy. With a longer runway from Congress, and clear, flexible, and timely guidance from the U.S. Department of the Treasury, we’ll have the pieces in place to unlock billions of dollars in new clean energy investments across rural America,” Emily Skor, CEO of Growth Energy, said.

Background:

Prior to introducing this legislation, Senator Roger Marshall also led a bipartisan letter calling for the U.S. Treasury Department 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. You may click HERE to read Senator Marshall’s full letter. 

Representatives Mann and Kaptur led a similar letter in the House.

A similar letter calling for 45z to be restricted to domestic feedstocks was sent by the American Farm Bureau Federation, American Soybean Association, National Corn Growers Association, and National Farmers Union to Treasury Secretary Janet Yellen and U.S. Office of Management and Budget Director Shalanda Young. 

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