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
Rep. Randy Feenstra, R-IA, details how the “One, Big, Beautiful Bill” Act (OBBBA) supports farmers, biofuels, and rural communities with tax breaks, crop insurance relief, and ag infrastructure.
December 23, 2025 02:01 PM
·
More than 1,100 residents and farmers have signed a letter urging Ag Secretary Brooke Rollins to step in, saying the proposal threatens irrigation supplies and long-term farm viability in the region.
December 23, 2025 11:37 AM
·
Producers across the country balanced winter weather disruptions, shifting export demand, and tightening margins as year-end decisions come into focus.
December 22, 2025 03:50 PM
·
Reviewing risk management now can help dairy and livestock producers enter 2026 with clearer margins and fewer surprises.
December 22, 2025 03:19 PM
·
Canada’s new voluntary Grocery Sector Code of Conduct will take effect on Jan. 1, a goodwill effort to promote fairness and transparency between retailers and support farms that sell directly to stores.
December 22, 2025 02:54 PM
·
With record grain harvests and rising global ethanol demand, leaders across the ag and energy sectors are pushing for year-round E15 sales to mitigate the strain on grain trade.
December 22, 2025 02:45 PM
·
