Tax Credits for Ethaol Biofuels Getting Closer to Being Finalized

Lorrie Boyer

Reporter

“Our goal with 45Z is to have maximum flexibility and maximum eligibility, so we are recognized the full spectrum of innovation that's taking place at the farm and at the plant. And if you look at an ethanol plant, half of the carbon intensity of our product comes from farming, from the feedstock corn. And so we want to have the ability to say, okay, how do I? What technologies can I use at the plant to reduce my carbon intensity? And what are some of the things that I can do with my grower partners where they reduce the carbon intensity as well?”

In June, the Department of Energy updated its greenhouse gasses regulated emissions and energy use and technologies, or GREET model, which is used to calculate the tax credit. She shares details on how those changes could ultimately benefit farmers.

“Essentially,Skor says this is how we calculate carbon intensity reductions of farming practices, and it is the first time that we have the federal government putting its a stamp on that, saying, "All right, if you do cover crops, this is what that equates to. If you do no till or low till, this is what that's going to equate to. So this is the model that we need to incorporate through Department of Energy into the 45C tax credit. Now Department of Energy has to update the model again to account for what USDA has to say. So there's one more step.”

Once that is done, Skor says the value of the 45Z tax credit can then be passed on to the value.