Clean Fuel Production Credit excludes producers from using used cooking oil 

By Blair Shipp, American Soybean Association 

As a new year begins, and the second Trump Administration takes shape in Washington, D.C., the American Soybean Association (ASA) and its farmer-leaders are focused on seizing the critical advocacy window before planting season. 

With the chance to meet with new policymakers and educate them on key soybean priorities, ASA is committed to ensuring that the needs of soybean farmers are front and center. From advancing biofuels policy to pushing for strong leadership at the USDA, ASA is taking action to protect and enhance the future of U.S. soybean production. 

In recent weeks, there have been significant updates that promise to impact the industry, including new developments on 45Z. In January, the U.S. Department of Energy (DOE) and USDA released important updates regarding the Clean Fuel Production Credit (45Z) following the Treasury Department’s interim guidance issued Jan. 11. 

The Treasury Department’s announcement provides interim guidance on the Clean Fuel Production Credit (45Z), allowing biofuel producers to begin claiming the credit immediately. Although the rulemaking process is still ongoing, this initial guidance creates new opportunities for producers while setting up guardrails that could benefit soybean growers. 

One major takeaway is the exclusion of imported used cooking oil (UCO) from eligibility under the 45ZCF-GREET model, an important step after significant advocacy from ASA and partners. Imported UCO will only be eligible for tax credits through the CORSIA model for sustainable aviation fuel, helping to level the playing field for soybean oil in the biofuels market. 

In response to this announcement, ASA and the National Oilseed Processors Association sent a joint media release, with ASA President Caleb Ragland, a farmer from Kentucky, noting the new guidance represents an investment in U.S. farmers and strengthens the domestic biofuels industry. 

The DOE released the 45ZCF-GREET model, which calculates emissions reductions and determines the tax credit value per gallon of biofuel. 

For soybean oil, the estimated tax credit is 33 cents per gallon for biodiesel and 19 cents for renewable diesel, although actual values may vary based on individual biofuel plants. This updated model helps bring soybean oil closer to parity with UCO, which had previously benefited from higher tax credits under federal programs. However, under Treasury’s new guidance, imported UCO is ineligible for the 45Z tax credit. 

Guidelines for climate-smart ag 

USDA has issued an interim final rule providing technical guidelines to help farmers incorporate climate-smart agriculture practices that could improve their tax credit scores for biofuels under 45Z. This rule includes a carbon calculator that enables farmers to calculate emissions reductions at the field level. 

As a result of years of feedback from ASA, the rule includes practices such as no-till, reduced till and nitrification inhibitors for soybean, corn and sorghum crops. These practices will allow farmers to enhance their emissions reductions scores and qualify for higher tax credits. The rule also sets up a process for farmers to report and verify these practices over time. 

These updates are part of ongoing efforts to finalize the 45Z program. Treasury plans to incorporate USDA’s climate-smart agriculture work into final guidance. 

The USDA rule is now open for public comment for 60 days, and ASA will continue to provide feedback during this period to ensure that the final rule prioritizes soybean oil in biofuel production. ASA also issued a media release in response to Treasury’s announcement, highlighting the positive elements of the guidance and its potential benefits for soybean farmers. 

Groups back Rollins for USDA Secretary 

ASA and numerous state soybean affiliates, including the Indiana Soybean Alliance (ISA), along with more than 420 agricultural organizations, are urging the swift confirmation of Brooke Rollins as the next USDA Secretary. 

In a letter led by the Ag CEO Council and sent to Senate Agriculture Committee Chair John Boozman and Ranking Member Amy Klobuchar, the groups emphasize the urgent need for strong leadership at USDA to tackle critical challenges facing American agriculture, including the farm bill, economic pressures and food security. A prompt confirmation of Rollins is essential to ensure USDA can begin addressing these issues and continue supporting farmers, ranchers, and rural communities nationwide. 

Rollins’ confirmation hearing is scheduled for Thursday, Jan. 23. 

Court halts CTA reporting requirement 

A federal appeals court has once again halted Corporate Transparency Act (CTA) enforcement. CTA is meant as an anti-money laundering measure, but the requirements for small businesses, including farms, to disclose beneficial ownership information would be a burdensome step for many. 

The U.S. Court of Appeals for the Fifth Circuit issued the ruling on Dec. 26 temporarily blocking compliance obligations under the CTA, which mandates that certain U.S.-based businesses submit detailed reports on their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). 

Most businesses faced a Jan. 1, 2025, deadline to submit initial BOI reports to FinCEN before the appeals court ruling, with FinCEN allowing an extension until Jan. 13. While this injunction temporarily halts the reporting compliance deadline of Jan. 13, ASA continues to strongly encourage all members to speak with their attorneys and/or tax professionals to determine how the CTA impacts their operations. 

Supporters of the law argued it was necessary to track bad actors who use anonymous corporate structures to conceal illicit activities. However, critics including agricultural groups have argued that the law constitutes federal overreach and imposes unnecessary regulatory burdens on small businesses and farmers. 

A legislative provision that would have delayed implementation of the CTA by one year was stripped from the final government funding package late last month.