NCGA Leader Outlines Needed Steps for Determining Aviation Tax Credit

A leader with the National Corn Growers Association today outlined for Internal Revenue Service officials the actions that must occur to make a new aviation fuel tax credit successful.

The comments by Michigan farmer and NCGA First Vice President Matt Frostic came during an IRS listening session on a new tax credit - called 45z Clean Fuel Production Credit after the section of a new law it is included in - designed to help transition biofuels like corn ethanol into the aviation sector.

"The Section 45Z Clean Fuel Production Credit has the potential to become one of the most important long-term demand drivers for agriculture in decades," Frostic said. "For that potential to become reality, the regulatory framework must be finalized clearly, predictably, and quickly."

Frostic specifically called for government agencies to:

Use a scientifically grounded and workable system that accurately reflects the conservation practices already being implemented across rural America rather than requiring practices that will not work in certain environments and areas of the country.

Implement a consistent greenhouse gas model across federal agencies for determining greenhouse gas reductions that qualify for the tax credit. Frostic urged the agency to use an updated model developed by the U.S. Department of Agriculture.

Recognize the ability of verified on-farm practices to reduce carbon intensity scores in a practical and workable way that does not distort planting decisions or disrupt existing grain markets.

"Corn growers are already implementing conservation practices that improve environmental outcomes while strengthening the resilience of their operations," Frostic said. "Practices like no-till, strip-till, and cover cropping improve soil structure, increase organic matter, improve water infiltration, and strengthen drought tolerance. These are real agronomic improvements with measurable outcomes."

The Section 45Z tax credit has the potential to become one of the most important long-term demand drivers for agriculture in decades. But corn grower leaders like Frostic have argued over the last few years that for the potential to become reality, the regulatory framework must be finalized clearly, predictably and quickly.

Read the Testimony