NASHVILLE, Tenn. (RFD NEWS) — Federal guidance on the 45Z Clean Fuel Production Tax Credit now more clearly steers biofuel incentives toward U.S.-grown crops, strengthening demand signals for domestic agriculture while narrowing eligibility for imported alternatives. Updated Treasury proposals implement changes enacted in the One Big Beautiful Bill Act (OBBBA) and clarify how the credit will function through 2029.
The revised guidance, to be published Wednesday in the Federal Register, prioritizes North American feedstocks, including U.S. soybeans and canola, while limiting eligibility for fuels made from imported waste oils such as used cooking oil and tallow. Industry groups say that change realigns biofuel policy with farm production rather than overseas sourcing.
A key shift is the removal of indirect land use change penalties from carbon scoring. That adjustment materially improves the economics for soy-based biofuels, effectively increasing the value of the credit and expanding eligibility across more oilseed pathways.
The update also underscores that 45Z works best alongside a strong Renewable Fuel Standard. Without complementary blending targets, the tax credit alone may not fully translate into sustained demand growth.
Farm-Level Takeaway: Clearer 45Z rules favor U.S. oilseeds, but final RFS volumes remain critical to locking in demand.
Tony St. James, RFD NEWS Markets Specialist
Tom Peterson with the New Mexico Cattle Growers Association says taxpayers are “unfortunate casualties” of this overlay now that the Mexican wolf population is stable under ESA guidelines.
September 05, 2025 01:21 PM
·
Co-Bank Lead Dairy Economist, Corey Geiger, joined us on Friday’s
Market Day Report for a further look at the drop in replacement heifers and the trend’s longterm impact on dairy producers and cattle prices.
September 05, 2025 12:40 PM
·
This Week in Louisiana Agriculture shows us why breaking even is going to be a challenge for corn producers across the state.
September 04, 2025 03:36 PM
·
The amendments affect BLM lands in several Western states. Comments on the Sage grouse proposals can be made to the BLM National NEPA Register until Oct. 3.
September 04, 2025 02:16 PM
·
Mike Formica with the National Pork Producers Council joined us on Market Day Report with his reaction to the EPA’s rollback of a Biden-era wastewater discharge mitigation plan.
September 04, 2025 01:41 PM
·
Farmers are struggling with low commodity prices and skyrocketing input costs, resulting in debt that is outpacing income across the sector, according to the USDA’s new farm income forecast.
September 04, 2025 01:05 PM
·
