Biofuel Provisions in IRA

Sources: American Soybean Assn. and CRS

The package’s biofuel provisions include a path forward for the biodiesel tax credit and funding for specific conservation programs, according to the American Soybean Association (ASA), including:

• 2-year extension of the biodiesel tax credit through 2024 before it converts to a clean energy technology-neutral credit for the following 3 years.
  •  Previous reconciliation proposals included a 5-year biodiesel tax credit followed by a 5-year clean energy credit—this bill moves from the previously negotiated 10-year model to a 5-year credit, which is standard across all energy credits in the bill
  •  Clean energy credits are domestic production credits, not blenders credits like the biodiesel tax credit
• The sustainable aviation fuel credit spans from $1.25 - $1.75 per gallon and is capped at $1.75 while prior versions were at $2.00.
  •  Modeling language on SAF stayed the same as the negotiated language in previous reconciliation bills—SAF credits will be based on ICAO or similar modeling methodology set forth by the Secretary of Commerce in consultation with USDA
  •  ASA will be pushing for GREET modeling to be the “similar methodology” approved by the Secretary of Commerce
  •  Coprocessing prohibition language on the SAF credit matches the biofuels industry ask and aligns with ASA’s policy resolutions and longstanding policy on coprocessing prohibitions for renewable fuel incentives
• Additional $500 million to improve the Higher Blends Infrastructure Incentive Program at USDA through 2031.
• $19.5 billion for agricultural conservation. It adds over $18 billion in additional funding for existing farm bill conservation programs, including the Environmental Quality Incentives Program ($8.45 billion), Regional Conservation Partnership Program ($4.95 billion), Conservation Stewardship Program ($3.25 billion), and Agricultural Conservation Easement Program ($1.40 billion).
• Also funding for farm bill energy and rural development programs.
   

     Link to Congressional Research Service report on the topic.