The U.S. government has yet to provide clarity around the 45Z tax credits outlined in the Inflation Reduction Act. The provisions are scheduled to go into effect beginning January 1, 2025, but a lack of certainty has many fuel retailers scaling back purchases until early next year.

As of mid-October, most fuel retailers only purchased 10% of the feedstock needed for the first quarter of 2025. This compares to more than 80% that has been purchased by now over the past ten years. Soy oil purchases are being delayed until there is more certainty surrounding the biofuels policy by the Treasury Department.

If the Treasury Department doesn’t clarify the regulations soon, a 45-million-gallon-a-year biodiesel plant in northwest Iowa may be idled.

Read more on the uncertainty surrounding the 45Z tax credit here.