Indy Standard

U.S. Senators Todd Young (R-Ind.), Mike Braun (R-Ind.), Sherrod Brown (D-Ohio), and Roger Marshall (R-Kan.), along with a bipartisan group of colleagues, have called on the Biden Administration to prevent taxpayer money from subsidizing biofuels produced using imported foreign feedstocks such as Chinese used cooking oil and Brazilian ethanol.

In a letter addressed to Treasury Secretary Janet Yellen, the senators urged the administration to limit the eligibility of the forthcoming 45Z Clean Fuel Production Credit to renewable biofuels made from domestically sourced feedstocks. The tax credit aims to enhance America's energy independence and stimulate the production of biofuels using American-produced feedstocks, thereby creating new markets for American farmers.

The letter highlights concerns over an increase in imports of Chinese used cooking oil being utilized for biofuel production in the U.S., which is displacing domestic feedstocks. The senators warned that poorly crafted regulations could harm American farmers, weaken the competitiveness of the American biofuel industry, and undermine U.S. energy independence.

"As Treasury works to craft 45Z guidance, we urge you to restrict the eligibility to renewable fuels made from feedstocks sourced domestically," wrote the senators. "If drafted and implemented correctly, the credit will help support robust American energy independence—incentivizing the production of biofuels made with domestically-produced feedstocks."

In addition to Senators Young, Braun, Brown, and Marshall, other signatories include Senators Jerry Moran (R-Kan.), Richard Durbin (D-Ill.), Tammy Duckworth (D-Ill.), Deb Fischer (R-Neb.), Pete Ricketts (R-Neb.), Tammy Baldwin (D-Wis.), Joni Ernst (R-Iowa), Amy Klobuchar (D-Minn.), Tina Smith (D-Minn.), and Eric Schmitt (R-Mo.).

The full text of their letter emphasizes that finalizing this rule promptly will provide clarity for farmers and other stakeholders involved in renewable fuel production. The senators argue that clear guidelines are essential for ensuring that 45Z supports both manufacturing and domestic feedstock production as intended by Congress.

The letter further states that if more is not done to support domestic feedstock utilization, there is a risk that U.S. tax credits will fund foreign agricultural producers instead of benefiting American agriculture.

"We urge you to issue proposed and subsequently final guidance for 45Z in advance of January 1, 2025," concluded the senators. "Such a rule should include language that only allows for distributing federal tax dollars to renewable fuel made with domestic feedstocks as Congress intended."