Illustration: Sarah Grillo/Axios
The Biden administration is punting final rules on climate-smart methods for producing sustainable aviation fuel and other renewable fuels to its successor.
Why it matters: The decision on the Section 45Z Clean Fuels Production Credit puts the issue in the hands of President-elect Trump's administration, but it's not clear that Trump is going to do anything with it.
Context: The credit provides a per-gallon tax break for the production of transportation fuels with lifecycle greenhouse gas emissions below certain levels.
- The credit, established by the IRA, took effect this year. It absorbed separate tax credits for technology-specific sustainable aviation fuel (SAF) and non-SAF transportation fuels.
Zoom in: The guidance — issued in a notice Friday — said Treasury intends to "define key concepts and provide certain rules in a future rulemaking," according to materials shared in advance with Axios.
- Trump, however, has vowed to significantly scale back efforts to address climate change.
- For now, at least, Treasury said it plans to propose rules for incorporating the emissions benefits from farming practices for cultivating corn, soybeans, and sorghum as feedstocks for SAF and other transportation fuels.
What they're saying: "There's real concern that what we see today may not stick," Geoff Cooper, president and CEO of the Renewable Fuels Association, said in an interview Friday ahead of the notice.
- "There's going to be a lot of hesitancy to act on this guidance, and make investments on this guidance, and to go to your bank and ask for a loan based on this guidance," Cooper said.
- The Advanced Biofuels Association said it hopes the Trump administration will finalize rules quickly: "Clear, multi-year guidance is essential to stabilize markets and support the hard-working farmers and producers who fuel our economy and our future."
Between the lines: The administration, which usually holds media calls on tax credit guidance, didn't make anyone available for an interview on 45Z.
- White House climate adviser John Podesta said in a statement that the guidance "reinforces the important role climate-smart agriculture plays in clean transportation as well as the importance of providing pathways for unbundled accounting of climate-smart practices that producers can count on."
The guidance did provide the annual 45Z emissions rate information, which directs producers to the appropriate methodologies for determining the lifecycle GHG emissions of their fuel.
- Reuters initially reported Thursday the administration was planning to release short-term guidance and leave major decisions to Trump.
