A bipartisan group of lawmakers in both the House and Senate have reintroduced the Farmers First Fuel Incentives Act, signaling a renewed push to bolster the renewable fuels industry and prioritize American agriculture. The legislation, spearheaded by Representatives Marcy Kaptur (D-Iowa) and Tracey Mann (R-Kan.) in the House, and Senators Roger Marshall (R-Kan.) and Amy Klobuchar (D-Minn.) in the Senate, seeks to extend the crucial 45Z clean fuel production tax credit and ensure it primarily benefits fuels derived from domestically sourced feedstocks.

The bill, initially introduced in the previous legislative session, has garnered additional support this time around, with Senators Joni Ernst (R-Iowa), Deb Fischer (R-Neb.), Elissa Slotkin (D-Mich.), Tammy Baldwin (D-Wisc.), and Pete Ricketts (R-Neb.) joining as cosponsors. This bipartisan backing underscores the widespread recognition of the importance of renewable fuels to both the agricultural sector and the nation's energy security.

The 45Z tax credit, a key component of the Inflation Reduction Act of 2022, currently offers incentives for the production and sale of low-emission transportation fuels. The credit structure provides 20 cents per gallon for non-aviation fuels and 35 cents per gallon for sustainable aviation fuel (SAF). Notably, facilities that adhere to prevailing wage and apprenticeship requirements can qualify for significantly higher credit values, reaching up to $1 per gallon for non-aviation fuels and $1.75 per gallon for SAF. This existing credit is slated to remain in effect for the years 2025, 2026, and 2027.

The Farmers First Fuel Incentives Act proposes a significant extension of this vital credit, pushing its expiration date an additional seven years to the end of 2034. This extended timeframe aims to provide greater long-term certainty for biofuel producers and farmers, encouraging further investment and innovation within the sector.

Beyond the extension, a central tenet of the bill is the inclusion of language that would restrict eligibility for the 45Z credit to fuels "derived from a feedstock which was produced or grown in the United States." This provision directly addresses concerns about the potential for imported feedstocks to benefit from a tax credit intended to support domestic industries. By prioritizing domestically sourced biomass, the legislation seeks to strengthen American agriculture, create rural economic opportunities, and reduce reliance on foreign inputs.

The reintroduced legislation has already garnered strong support from key industry stakeholders. Organizations such as Growth Energy, the American Soybean Association, the National Oilseed Processors Association, the National Corn Growers Association, the National Sorghum Producers, the U.S. Canola Association, and the Renewable Fuels Association have all voiced their approval.

Emily Skor, CEO of Growth Energy, emphasized the critical need for long-term certainty provided by the bill, stating, "Farmers and businesses need to know this tax credit is here to stay before they can feel confident investing in dozens of new energy projects across rural America. With this bill they’ll have the certainty they need to accelerate innovation, create thousands of new jobs, and secure new markets for farmers and biofuel producers." She further commended Senators Marshall and Klobuchar for their leadership and thanked other rural champions for their efforts.

The reintroduction of the Farmers First Fuel Incentives Act signals a strong commitment from a bipartisan coalition to support the growth of the domestic renewable fuels industry and ensure that American farmers are at the forefront of this burgeoning sector. As the bill moves through the legislative process, it will be closely watched by agricultural producers, biofuel companies, and environmental advocates alike.