LINCOLN, Neb. (DTN) -- Though the Biden administration's much-anticipated release of guidance for the 45Z Clean Fuels Production tax credit came last week, the vast majority of industry groups focused more closely on what they still don't know about 45Z.
Probably no industry faces as immediate of a need for answers quite like biomass-based diesel producers, who needed 45Z guidance months ago or face continued slowdown and/or shutdown.
Companies that have relied on the biodiesel blenders tax credit, which expired at the end of 2024, were expecting to replace the blenders credit with 45Z.
Now, there will continue to be a push to renew the blenders credit at least temporarily while the incoming Trump administration finishes work on 45Z.
In the hours following the announcement on Friday, industry groups raised questions about what's next.
NATSO, representing truck stops and travel plazas, along with SIGMA: America's Leading Fuel Marketers, the National Association of Convenience Stores, and American Trucking Associations the Truckload Carriers Association, immediately began asking about the blenders credit.
"The associations, which represent fuel retailers and consumers of biofuels, urge Congress to extend the $1 per-gallon biodiesel blenders tax credit as quickly as possible," the groups said in a press statement.
David Fialkov, executive vice president of government affairs for NATSO and SIGMA, said the 45Z announcement was a "classic case of 'too little, too late' for a supply chain that needed clear, unambiguous direction months ago."
Fialkov said the guidance "fails to provide the market with the certainty needed to mobilize new capital, and as a result we expect that potential investments in clean fuel will be sidelined."
Fialkov said he questioned how useful the 45Z would be for current biofuels producers.
"Very few ethanol producers will be able to access the 45Z credit, eliminating any potential for this policy to lower retail gasoline prices," he said.
"Even worse, the new 45Z credit will result in a materially diminished incentive for renewable diesel fuels and biodiesel. It appears that the preliminary proposal would allow imported used cooking oil from China to claim the credit if it is making renewable jet fuel but not renewable diesel. This is environmentally and economically unjustifiable. Diesel prices will go up and fuel emissions will go up. This policy needs to be fixed as soon as possible."
LeeAnn Goheen, senior director of government affairs for NATSO and SIGMA, said it was time for Congress to extend the blenders credit to "help insure market stability."
Clean Fuels Alliance America said in a statement last week that "many domestic producers have been stymied over the past year in negotiating feedstock and fuel offtake contracts for 2025" while waiting for 45Z guidance.
Kurt Kovarik, Clean Fuels vice president of federal affairs, said his group is hopeful the 45Z announcement "provides the necessary certainty" that producers can rely on ahead of the final rules.
"Clean fuel producers still need the carbon intensity scores from the GREET model to calculate their credit values," he said.