Senator Marshall, Representative Mann Lead Bipartisan Legislation Fighting for Farmers with Biofuel Tax Credit

US Senator Dr. Roger Marshall has introduced the bicameral and bipartisan Farmer First Fuel Incentives Act requiring the Treasury Department to restrict the eligibility of the 45Z Tax Credit to renewable fuels made only from domestically sourced feedstocks and extending the tax credit to make it a full 10-year credit.

This bill is co-led with Senator Sherrod Brown of Ohio with companion legislation introduced by Representatives Tracey Mann of Kansas and Marcy Kaptur of Ohio in the House of Representatives. Senator Pete Ricketts of Nebraska, Amy Klobuchar of Minnesota, Deb Fischer of Nebraska, Tammy Baldwin of Wisconsin and Tina Smith of Minnesota also cosponsored the legislation.

The 10-year credit will give the ethanol industry the time and financial incentive to build up the infrastructure needed for the US to be less reliant on foreign fuel, open new markets for farmers and increase ethanol production across the Midwest. However, they recently learned that 45Z has a glaring flaw that needs to be fixed for farmers wanting to sell feedstocks to the biodiesel and renewable diesel industry. If 45Z goes into effect as is, taxpayers will be massively subsidizing Chinese used cooking oil and would all but eliminate the use of homegrown soy or corn oil in renewable diesel.

"It's very tough in farm country with high interest rates and low commodity prices, which is exactly why we can't have a tax policy that will lower commodity prices even more. While we support free trade and open markets, we do not believe foreign feedstocks should be incentivized through the hard-earned dollars of US taxpayers to the detriment of American farmers," said Senator Marshall. "This legislation puts farmers first to ensure they are the primary beneficiaries of renewable fuel tax incentives and provides businesses a decade of certainty."

"In no world should American tax incentives first benefit foreign producers," said Congressman Mann. "While the use of foreign feedstocks can play an important role in producing domestically manufactured ethanol, biodiesel, renewable diesel and sustainable aviation fuel, we must not displace harvest in America. Our legislation puts American farmers first by ensuring that American tax credits are incentivizing American-grown products."

"US soybean farmers have been at the forefront of our domestic clean-energy production through the booming biodiesel and renewable diesel industry over the last decade. The Farmer First Fuel Incentives Act ensures our Kansas soybean growers maintain access to this vital market sector going forward and strengthens the clean fuel production credit for the future," Kaleb Little, Kansas Soybean Association CEO, said.

"We appreciate the efforts of Senator Marshall and his colleagues on this bill to ensure imported feedstocks do not receive tax credits funded by American taxpayers in the 45Z program for Sustainable Aviation Fuel. Companies have a right to import feedstocks from foreign countries, but those foreign producers should not receive tax credits funded by US taxpayers," said Kansas Corn Growers Association CEO Josh Roe.

"Ensuring American farmers reach maximum profitability and build resiliency to pass down their farms to the next generation should be our top priority," said Adam York, Kansas Sorghum Producers CEO. "This legislation helps make sure the intended benefits of this program arrive into our rural economies."

Prior to introducing this legislation, Senator Marshall also led a bipartisan letter calling for the US Treasury Department to restrict the eligibility of the 45Z Tax Credit to renewable fuels made only from domestically-sourced feedstocks, like Kansas soybean oil and corn oil. Representatives Mann and Kaptur led a similar letter in the House.

A similar letter calling for 45Z to be restricted to domestic feedstocks was sent by the American Farm Bureau Federation, American Soybean Association, National Corn Growers Association and National Farmers Union to Treasury Secretary Janet Yellen and US Office of Management and Budget Director Shalanda Young.

(Information courtesy Senator Marshall's Office.)