NCGA Supports Legislation Establishing Guidelines for Sustainable Aviation Fuel Tax Credits

Legislation was introduced in the U.S. House and Senate today that would extend a new sustainable aviation tax credit for biofuels for ten years and prevent foreign producers from accessing the credits.

The Senate bill was introduced by Sens. Roger Marshall (R-Kansas) and Sherrod Brown (D-Ohio) and the House bill was introduced by Reps. Tracey Mann (R-Kansas) and Marcy Kaptur (R-Ohio).

The National Corn Growers Association praised the development.

"Corn growers are making every effort to help the airline industry lower its greenhouse gas emissions through the use of corn ethanol," said Minnesota farmer and NCGA president Harold Wolle. "We are deeply appreciative of these leaders for introducing legislation that establishes requirements for the tax credit that will level the playing field for America's corn growers."

The tax credit, referred to as 45Z, is part of the Inflation Reduction Act, which was signed into law in 2022. The law provides tax incentives to refineries that produce biofuels that can be used in commercial aircraft and is part of the Biden administration's ambitious effort to address climate change.

The administration is still hashing out specifics about the credit, including who receives it. Many U.S. biofuel producers are concerned about foreign shipments of biofuels, which in some cases lack proper carbon accounting.

Growers have also voiced concerns about the requirements for acquiring the tax credits.

In May, the U.S. Department of Treasury released its guidance on eligibility for the credits, which has been met with continued concern by growers troubled that they would be required to implement environmental practices that are impractical in certain climates.

Corn grower leaders continue to work with Congress and administration officials to hammer out practical approaches that will help growers access the tax credits.