Biofuel industry groups are urging the US Treasury to swiftly implement guidance on the 45Z tax credit for biomass facilities. The 45Z credit allows eligible facilities to claim a tax credit for producing and using biomass-based diesel fuel. In 2020, the Tax Cuts and Jobs Act (TCJA) modified the 45Z credit, but the Treasury has yet to provide guidance on the changes.
The biofuel industry is calling for immediate guidance on the modified credit, citing the importance of certainty and clarity in the tax code. Without guidance, companies are left uncertain about their eligibility for the credit and the process for claiming it. This uncertainty poses significant risks to the development of new biomass facilities, as well as the continued operation of existing ones.
The biomass industry is concerned that the lack of guidance will lead to delays and increased costs for projects already underway. It is also worried that the uncertainty will hinder the growth of the biomass sector, which is critical to meeting the country’s renewable energy goals. The industry argues that prompt guidance is essential to ensuring a level playing field and to avoiding unintended consequences.
The Treasury’s delay in providing guidance has also raised concerns about the potential for retroactive changes to the credit. The industry is worried that the Treasury may revisit the rules and make changes that could impact the credit’s value or even eliminate it altogether. This uncertainty is causing companies to hesitate on investing in new projects and revising existing ones.
The biofuel industry is urging the Treasury to provide guidance on the 45Z credit as soon as possible, without delay or ambiguity. The industry is also calling for the Treasury to engage with stakeholders and provide a clear and consistent interpretation of the credit. The industry believes that timely guidance will help to create a stable and predictable environment for investment in the biomass sector, ultimately benefiting the economy and the environment.