Ohio Soybean Association Applauds Ohio Lawmakers Protecting Domestic Biofuels Feedstocks
September 24, 2024
The Ohio Soybean Association (OSA) applauds the bipartisan group of lawmakers who are proposing an extension to the 45Z tax credit for low-carbon biofuels for 10 years. The new measure would also restrict the incentive to products derived from domestic feedstocks, including soybean oil. The group includes Ohio lawmakers Sen. Sherrod Brown, who is co-sponsoring the measure in the Senate, and Rep. Marcy Kaptur, who is co-sponsoring a companion bill in the House.
The 45Z credit is set to take effect in January and would expire at the end of 2027. The value of the credit is determined based on the carbon intensity of the fuel produced and is not currently limited to domestic feedstocks. The USDA currently expects 14 billion pounds of soybean oil to be used for biofuel production in 2024-2025.
“Thank you to Sen. Brown and Rep. Kaptur for leading the way on this issue, prioritizing Ohio farmers and reducing the U.S. biofuels industry’s dependence on foreign feedstocks,” said Rusty Goebel, OSA president and Williams County soybean farmer. “While the use of foreign feedstocks can play a role in producing domestically manufactured biodiesel, renewable diesel, and sustainable aviation fuel, the American taxpayer-funded 45Z tax credit should only apply to biofuels produced from domestic feedstocks by domestic fuel producers.”
This legislation comes on the heels of a proposed cap on soybean oil for biofuels that qualify for California’s Low Carbon Fuel Standard, which was announced in August. These restrictions in addition to the current 45Z tax credit structure could significantly hamper soybean oil’s inclusion in biofuel production and negatively impact an already down farm economy.
According to Clean Fuels Alliance America, biofuels account for 13 percent of the bushel price of soybeans, making it a vital domestic market for soybean oil.
