The American biofuels and oilseeds industries have welcomed the signing into law of US President Donald Trump’s ‘One Big Beautiful Bill Act’ on 4 July.
“The reforms in this legislation represent a major win for the US oilseed processing industry and the American farmers and rural communities it supports,” the National Oilseed Processors Association (NOPA) and the American Soybean Association (ASA) said in a press release on 3 July.
The act limits eligibility for the 45Z Clean Fuel Production Credit to feedstocks grown and produced in the USA, Mexico or Canada.
“This critical provision disqualifies imports such as Chinese used cooking oil (UCO) and foreign tallow from receiving US clean fuel tax incentives, helping ensure a level playing field for American-grown oilseeds like soya and canola,” NOPA and ASA said.
The legislation extends the 45Z credit has been extended through the end of 2029, two years beyond its current expiration date of 31 December 2027.
It revises how lifecycle greenhouse gas (GHG) emissions are calculated by excluding emissions from indirect land use change (ILUC).
Additionally, it includes provisions to support small-scale biodiesel producers by increasing the Small Biodiesel Producer Credit to 20 cents/gallon from 10 cents/gallon, and extending the credit – which had expired at the end of 2024 – to the end of 2026, Ethanol Producer Magazine wrote on 8 July. The credit applies to the first 15M gallons/year of agri-biodiesel made by small producers (those with capacities of less than 60M gallons/year).
However, the act eliminates the special 45Z credit rate for sustainable aviation fuel (SAF), capping it at US$1/gallon rather than US$1.75/gallon as established by the Inflation Reduction Act of 2022, according to Ethanol Producer.
“This policy comes at a critical time for American agriculture,” said Joshua Shields, senior vice president at leading biofuels producer POET. “An extended window for 45Z gives us greater certainty to invest in new technologies and practices that are pivotal to strengthening markets for farmers and ensuring American biofuels energy dominance.”
The One Big Beautiful Bill Act contains hundreds of provisions in key areas such as health care, tax reforms, energy policies, environmental regulations, defence, education, immigration and border control, and transport and infrastructure investments.
The legislation makes savings through cuts to food benefits and health care and rolling back tax breaks for clean energy such a wind, solar and electric vehicles, according to a 3 July BBC report.
About US$150bn would be spent on border security, detention centres and immigration enforcement officers. Another US$150bn was allocated for military expenditures, including the president's "gold dome" missile defence programme, the report said.
The Congressional Budget Office has estimated that the act could add US$3.3tn to federal deficits over the next 10 years.
