A key part of the Biden administration’s plan to connect biofuel policy to climate-smart farming is now under review at the White House.
At issue are the Agriculture Department’s guidelines for farming practices that minimize greenhouse gas emissions, a precursor to a clean energy tax credit that’s due to take effect in January.
Officials didn’t detail the final interim rule, but biofuel producers have been pressing their case that corn-based ethanol and other fuels derived from crops can offer substantial reductions compared to petroleum. Agriculture Secretary Tom Vilsack has also touted biofuel as a lower-emissions alternative for aircraft.
If the Treasury Department adopts a favorable approach to ethanol and other biofuels, they could be used for aircraft and other purposes and claim greenhouse gas reductions of 50 percent or more compared to conventional fuels — a requirement for the credit in Section 45Z of the tax code. Congress included the credit in the Inflation Reduction Act.
