By Margy Eckelkamp, The Scoop magazine
The One Big Beautiful Bill (OBBB) delivered additional surety for the 45Z biofuel blender tax credit.
After almost three years of talking about what could be spelled out by 45Z, Mitchell Hora says farmers can now get “locked in” to capitalize on the program.
“This 45z deal could be absolutely game changing for my family’s farm, and I think it will be game changing for other family farmers across the country,” Hora says. “It’s going to have a ripple effect that could change global agriculture. So that’s why I’m just so adamant that we have got to get this right, and we’ve got to hit the ground running.”
Hora, an Iowa farmer and founder of Continuum Ag, says there are five things every farmer should know about what the OBBB has laid out. He also says there are unanswered questions.
1. It’s happening.
“They [lawmakers] cut almost all of the other green funding programs within the Inflation Reduction Act. They cut a bunch of that old stuff, but they kept the 45Z program,” Hora says. “It’s alive, it’s locked in, it’s going to happen.”
2. OBBB gave 45Z an extension
The 45Z program now has additional momentum behind it as the OBBB outlined an extension now into 2029.
“Now biofuels producers have more time to really capitalize on this,” Hora says.
3. Only North American feedstocks are eligible.
Imported used cooking oil has become a focus for may who have critiqued previous blend credits as feedstocks from other countries were not limited.
Now, only feedstocks from North American sources can be used as part of this program. This includes corn, soybeans, used cooking oil, beef tallow, and canola.
4. Current language ignores indirect land use change.
“This single thing lowers everyone’s CI score across the board. It definitely helps corn and corn based ethanol and the soybean side as well,” Hora says.
5. Tax credits are transferrable.
Biofuels producers can take their tax credits and sell them to another buyer if they aren’t going to use them themselves.
Additionally, this makes it easier for farmer-owned co-op ethanol plants to process their taxes.
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