NASHVILLE, Tenn. (DTN) -- As rural America awaits the fate of the 45Z Clean Fuels Production Tax credit, one member of Congress told the ethanol industry during the National Ethanol Conference in Nashville, Tennessee, this week he is making the case to fund the credit as part of a coming congressional budget resolution.
That funding may come on the back of expected cuts to electric-vehicle subsidies in the Inflation Reduction Act (IRA).
Both the U.S. House of Representatives and U.S. Senate are working toward cutting up to $2 trillion in federal spending over ten years under direction of President Donald Trump.
Rep. Randy Feenstra, R-Iowa, told industry officials this week he's working to convince fellow lawmakers that 45Z is important to energy security and energy independence, as called for by the Trump administration.
The expected cut of subsidies for electric vehicles from the IRA, he said, could clear the way for 45Z.
Chances are slim that any EV subsidies will survive the current budget debate, Feenstra said, because the Republican majority isn't fond of EVs.
"There's going to be no more credits on EVs," Feenstra said on Tuesday.
"There's just disdain for this in the Republican Party. That's part of the Inflation Reduction Act that we're going to cut, we're going to reduce. And then my feeling is 'all right, let's take those dollars and invest them in something that's productive and has a return on investment like 45Z.'"
The 45Z provides a tax credit to biofuels producers on a per-gallon basis based on the carbon intensity of fuels production. Fuels with lower carbon intensities will receive more in tax credits. Right now, the 45Z is set to expire at the end of 2027.
The 45Z is a potential economic driver for rural America because it provides incentive to farmers and biofuels producers to take carbon-cutting measures on the farm in order to be a feedstock provider to a sustainable aviation fuel industry.
Trump has been pushing the Senate to pass the House version of a budget bill that would include tax policy and is expected to include budget cuts.