For months, we’ve been delving into the implications of US Code 45Z, the Clean Fuel Production Credit, and what it means for our customers, market, and industry. Let’s look at some of the details.
What is US Code 45z?
US Code 45Z is an initiative designed to promote the use of domestically sourced feedstocks in the production of clean transportation fuels, such as:
- Ethanol
- Biodiesel
- Renewable diesel, and
- Sustainable aviation fuels (SAF)
Credit Amount: The credit amount is determined by the specific type of fuel produced and its effectiveness in reducing emissions.
US Code 45z and the Ag Industry
According to S&P Global Commodity Insights
This could drive an estimated growth of an additional 1.4 billion gallons of renewable diesel and biodiesel by 2030.
Susan Reidy, World-Grain
While foreign feedstocks will still play a role in the biofuel sector, this credit incentivizes manufacturers to prioritize domestic options.
By doing so, we can strengthen our local agricultural economy and support US farmers. The potential benefits of this shift are substantial, as it could reshape the rationale behind using lower-cost foreign feedstocks. The structure of the production tax credits is a base amount per gallon and utilizes an emissions factor from production. A bonus credit currently available is five times the base amount for facilities that meet additional requirements relating to prevailing wages and other personnel requirements. The credits could be substantial for producers and those participating in the commodity trade.
Committed to Support You
As part of the US agriculture industry, Greenstone Systems is committed to investing in our domestic farmers and strengthening our products through initiatives like the Clean Fuel Production Credit to boost the US economy and reinforce the cooperative system that supports our farmers.
Cultura Technologies is constantly engaged in thought leadership for our industry and customers. To maximize these opportunities, we closely collaborate to develop unique systems that identify usage, clarify regulatory qualifiers, and track performance.
