The 45Z Tax Incentive Uses Tax Dollars to Promote Imported Feedstocks and Displaces Soybean Oil in Biofuels

The Clean Fuel Production Act (45Z) gives incentives to imported feedstocks and leaves domestic soybean oil behind. 45Z is a “Carbon Intensity” based credit that is modeled after California’s Low Carbon Fuel Standard (LCFS). Carbon Intensity based credits stack the deck against Midwest soy and give farm-based feedstocks artificially low scores, pushing our farmers out of the biofuel marketplace.

Lower Soybean Prices

Under the 45Z regulations, soybean oil will lose its ability to compete in the biomass-based diesel and SAF markets. Imports from Brazil, China, and SE Asia receive twice (2X) the credit for biodiesel, three (3X) the credit for SAF, and four times (4X) the credit for Renewable Diesel (the fastest growing biofuel sector). These credit disparities send the market signal to use anything but soy in advanced biofuels.

Biofuel Disparities

Biofuel volumes are highly dependent on the volumes set by the EPA in the Renewable Fuel Standard (RFS), and 45Z will not bring more volumes onto the market. Instead, it will pick winners and losers within the industry. With disproportionate credits going to imports, policymakers are stacking the deck against you and putting their thumb on the scale in favor of China and Brazil.

Energy Independence

Soybean oil-based biofuels promote domestic energy independence. 45Z will destroy the soybean oil to biofuel supply chain and replace it with imports that special interests believe to be more environmentally friendly. Promoting imports undermines the Energy Independence and Security Act and the RFS by displacing soybean oil from the industry, making Americans less secure, less safe, and more energy dependent.