Grassley, Iowa Congressional Members Press for Clarity on Biofuels Tax Credit to Ensure 45Z Works for the Ag Economy

Grassley, Iowa Congressional Members Press for Clarity on Biofuels Tax Credit to Ensure 45Z Works for the Ag Economy

"45Z guidance should provide farmers with maximum flexibility to implement a wide range of practices based on what works best for their farm."

WASHINGTON - Sen. Chuck Grassley (R-Iowa) joined Sen. Joni Ernst (R-Iowa), Rep. Mariannette Miller-Meeks (R-Iowa) and a group of House and Senate colleagues in a letter urging the Trump administration to ensure the final 45Z clean fuel production credit rule recognizes a wide array of on-farm practices that put family farmers first.

In their letter to Secretary of the Treasury Scott Bessent, Secretary of Energy Chris Wright and Secretary of Agriculture Brooke Rollins, the lawmakers applauded the Trump administration's interagency efforts to develop this guidance. Reps. Ashley Hinson (R-Iowa) and Zach Nunn (R-Iowa) also signed the letter.

"45Z was designed to add value to farmers' crops and expand domestic production of clean, homegrown biofuels. Still, its success depends on clear, workable rules allowing farmers and biofuel producers to meaningfully participate-clarity the Biden administration repeatedly failed to provide," the lawmakers wrote.

"45Z guidance should provide farmers with maximum flexibility to implement a wide range of practices based on what works best for their farm. Moreover, the guidance must ensure the credit does not box out family farmers from participating by imposing unnecessary red tape or overly prescriptive requirements," they continued.

"Delivering this outcome after years of mismanagement under the previous administration will be a clear win for U.S. farmers and demonstrate the Trump administration's commitment to a stronger rural America," the lawmakers concluded.

The letter was also signed by Sens. Roger Marshall (R-Kan.), Deb Fischer (R-Neb.), Pete Ricketts (R-Neb.), Jon Husted (R-Ohio), Jerry Moran (R-Kan.) and Mike Rounds (R-S.D.), as well as Reps. Adrian Smith (R-Neb.), Tracey Mann (R-Kan.), Mike Flood (R-Neb.), Michelle Fischbach (R-Minn.), Brad Finstad (R-Minn.), David Valadao (R-Calif.), Tony Wied (R-Wis.), Erin Houchin (R-Ind.), Mike Bost (R-Ill.), Don Bacon (R-Neb.), Derek Schmidt (R-Kan.) and Darin LaHood (R-Ill.).

Read the full letter HERE.

Background:

In July, Grassley voted for the Working Families Tax Cuts law, which is helping revitalize and strengthen Iowa's renewable fuels industry and deliver for Iowa farmers. The law improves and extends the Clean Fuels Production Tax Credit through 2029, including the small agri-biodiesel tax credit - which provides transition relief to small biodiesel producers. After the Biden administration failed to release functional guidance to implement the credit, many small producers, including four in Iowa, shut down operations.

In January 2025, Grassley criticized the Biden Treasury Department's 45Z guidance, saying it "left farmers with more questions than answers." In April 2024, Grassley released a video statement and spoke on the Senate floor to condemn the Biden administration's GREET Model decision and its impact on 45Z. That December, he called on the Biden administration to release updated 45Z guidance for clean fuels production.

Grassley has long advocated for homegrown Iowa biofuels. Last month, he praised the Trump administration for advancing its initial 45Z guidance, providing much-needed certainty for farmers, biofuel producers and consumers.

-30-

• Print
• Email
• Like
• Tweet