The US House of Representatives has passed a bill extending the 45Z clean fuel production tax credit, Ethanol Producer reported.
Commonly known as the “big, beautiful bill”, HR1 was passed narrowly by a vote of 215 to 215 on 22 May, the 23 May report said.
The bill, which also included updates, would now be considered by the US Senate, where it was likely to be amended, Ethanol Producer wrote.
Welcoming the move to extend the tax credit, Geoff Cooper, president and CEO of the Renewable Fuels Association (RFA), was quoted as saying: “In addition to extending the 45Z clean fuel production credit by four years, the bill also reinstates crucial tax benefits that will stimulate research, experimentation and innovation across the ethanol supply chain.
“As the bill now moves to the Senate, we hope additional improvements can be made to ensure these tax policies truly drive demand growth for American-made renewable fuels.”
Established by the Inflation Reduction Act of 2022, the existing 45Z tax credit provides a tax incentive for the production and sale of low-emission transformation fuels.
The credit starts at 20¢/gallon for non-aviation fuels and 35¢/gallon for sustainable aviation fuel (SAF). For facilities that meet current wage and apprenticeship requirements, the value of the tax credit is up to US$1/gallon for non-aviation fuels and US$1.75/gallon for SAF. The tax credit is currently in place for 2025, 2026 and 2027.
Section 111112 of the HR1 aims to limit availability of the 45Z credit to fuels produced from feedstocks produced or grown in the USA, Mexico or Canada. It also aims to exclude indirect land use change (ILUC) from being used to calculate the lifecycle greenhouse gas (GHG) emissions of eligible fuel.
The draft bill would extend the 45Z credit until 31 December 2031, the report said.
Additional changes to the 45Z credit aimed to restrict access to the credit for certain prohibited foreign entities, Ethanol Producer wrote.
