Farming Video | 45Z Biofuels Tax Credit: Will Farmers Actually Get Paid?

00:00:00 Biofuels legislation, tax policy, and how it's gonna impact your farming operation and your bottom line, 45 Z. 00:00:08 We're talking about it here with Kurt Covar Keys with Clean Fuels Alliance America. We just did a great interview here in the booth at extreme 00:00:15 Ag, uh, at Commodity Classic, and I wanted to give the highlights to our social media following Kurt, a lot of moving targets. 00:00:23 There's still some ambiguity, but give me where we are now as of end of February, 2026 and moving forward from your perspective. Yeah. 00:00:30 Where we're at right now with the Clean Fuel Production Credit, also known as 45 Z. Uh, it's been in place since the beginning of 2025, 00:00:36 but we had lack of clarity from treasury on how to claim the credit, how to, how to take advantage of the credit. 00:00:41 So there was really a lot of, uh, uncertainty around the marketplace. What we got on February 6th 00:00:46 of this year was proposed guidance from treasury. That went a long way to answering a lot of the questions that we have from a biofuel, biodiesel, 00:00:54 producer perspective in terms of what's a qualifying sale, uh, and a lot of the, the, the, the, 00:01:00 the technical nature of it. What we're still waiting on though is USDA to finish their carbon intensity calculator. 00:01:06 That's the, the feature that's gonna feed into the carbon intensity models from the Department of Energy that will reward the, 00:01:12 the on-farm practices in the value of the credit that will, uh, anticipate we'll get that this summer. 00:01:18 Um, the comment period on the treasury component closes on April 6th. We, we intend to comment on that, 00:01:24 and I think it'll be final, sometime late summer or early fall. But already with this proposed guidance 00:01:29 that it says taxpayers can rely on this until final guidance is issue. You can imagine the following here at Extreme Ag 00:01:37 producers forward thinking agricultural producers, they've been hearing about this for a while. You can imagine where there might be some 00:01:43 skepticism to say the least. Okay, when is this finally going to make me a nickel? When am I going to finally, 00:01:49 are you optimistic here this summer? Yeah. Very optimistic this summer. And I think, I think now 00:01:54 that we have proposed guidance from treasury that signifies that we know the rules of the road in terms of the producer 00:02:00 and how to claim the credit. Once we get the key component from USDA and it feeds in that model, uh, every farmer's gonna be able 00:02:07 to look it up, put it, put their, uh, data into the calculator and have a real, uh, idea as to 00:02:12 what their carbon intensity score is, and then they're gonna have to work with a third party to, to, to monetize that through the sale of their commodities 00:02:20 to a biofuel producer. Okay. What do you think this money looks like? I mean, obviously agriculture producers are gonna 00:02:27 be skeptical about this. Like, okay, the producers of the ethanol make a bunch of money, but I'm out here growing corn and soy. 00:02:33 Right. You know, what's the biodiesel, what's the actual soy person? Yeah. What's Your, what's your gut tell you? 00:02:38 I think the farmer's gonna have a lot of leverage because, uh, the biodiesel producer's gonna want to capture as much value as they can. 00:02:45 In order to do that, they're gonna have to convince the farmer that it's, it's worthwhile to, to take those necessary, uh, conservation practices. 00:02:53 Because if they don't, they're not gonna get rewarded for it. Right. So, I, I don't think, I don't think the biodiesel 00:02:58 producer's gonna be able to, to convince a farmer to do it without sharing that value with them. Yeah. Got it. Anything else you need to know that, I mean, 00:03:04 we shared here a lot of high level stuff we're talking about. We had Kelly, we had the, you know, 00:03:07 the renewable, uh, you know, roots. We had all this stuff. What do I need to do right now? What do you think, I mean, what would be 00:03:13 your advice? What do you telling people? My advice would to a farmer would be get as educated as you possibly can find, 00:03:19 find resources out there without paying for it Now, um, follow what USDA is gonna do. Pay close attention to that just and, 00:03:26 and talk to the biofuel producer. If you've got an ethanol plant in the, in the area that you're already, you know, sending your grain to, 00:03:32 or if you're, you're merchandising your grain with a DM or a GP or making biodiesel, I would start talking to them and find out, you know, what do I need to know to be 00:03:40 as educated as I can about what practices I can pursue that would add value and how to, how to capture that value. And 00:03:45 We also heard at the panel here from, uh, Mr. Busing, get signed up, get signed up, get things going on this carbon intensity score, figure out 00:03:52 what it is, and if you can start getting your data all collected, because when the trigger gets pulled on this, it's probably gonna be 00:03:59 Pretty Quick, very fast. That's right. Got it. He's Kurt Covar with Clean Fuels Alliance America. I'm Damien Mason. Extreme ag coming at you 00:04:05 from the floor commodity class. We just had one hell of a session talking about 45 z biodiesel legislation, tax policy, 00:04:11 and how you as a farmer can profit from it. This is the future of ag and this kind of economic, agricultural situation. 00:04:17 You need every advantage you can get, we're trying to bring it to you, help you far better, and also make money coming at you from Commodity Classic 00:04:24 from the Extreme AG Booth. 00:04:25.025 --> 00:04:25.965