USDA Media by Lance Cheung.

The USDA is advocating for expanded farmer eligibility for tax credits under the 45Z program, which promotes sustainable aviation fuel (SAF). Agriculture Secretary Tom Vilsack called for a broader array of crops and farming practices to be included in the 45z tax credit regulations.

The 45Z credits will be available starting in 2025. They reward fuels that reduce greenhouse gas emissions by at least 50%. Current regulations, like the 40B credits, have strict criteria that only a small percentage of U.S. corn and soybeans meet.

Farm groups, including the National Farmers Union, National Corn Growers Association and American Soybean Association, are pushing for more flexibility and tailored guidelines. They argue that the “bundling” approach of the 40B credits is too restrictive.

Vilsack also highlighted the potential increase in domestic SAF production and emphasized that 45Z credits should apply only to fuels made from U.S. feedstocks to avoid reliance on imported materials. Additionally, the USDA is issuing new grants to support biofuel infrastructure.

Read more on the SAF tax credits here.