IRFA Recommends Prevailing Wage and Emission Calculation Changes to 45Z Tax Credit

IRFA Highlights Changes to Enhance American Energy Security

Press Contact: Hannah Love

[email protected]

WEST DES MOINES, IA - Yesterday the Iowa Renewable Fuels Association (IRFA) submitted comments to the U.S. Treasury and the Internal Revenue Service (IRS) regarding proposed rules for the 45Z Clean Fuel Production Tax Credit. IRFA noted that the proposed rule is a great first step, but key modifications are necessary to unlock 45Z's full potential.

In its comments, IRFA highlighted that "Ongoing events in Iran have highlighted that the work to achieve American energy security is not done. While better off than only a few decades ago, rising prices at the pump are a clear signal that American consumers are still impacted by events half the world away. In order protect the American economy, we must enhance our energy security. Proper implementation of the 45Z Clean Fuel Production Tax Credit can be a powerful tool in this fight."

Key points from IRFA's comments include:

Prevailing Wage and Apprenticeship requirements must be streamlined and made workable in the real world

"Unfortunately, IRFA has received nearly universal reports that the administrative burden and cost to comply with PWA requirements are crippling the benefit of the program."

Extend the end-of-quarter corrective action period and add safe harbor

"…the Agency should establish a safe harbor from these fines for any plant that has a pending job category or wage determination before the Department of Labor that goes unanswered during the quarter."

Speed Department of Labor job category and wage rates determinations

"IRS should immediately work with the Department of Labor to determine county-specific wage rates for any county where a potentially qualifying facility is located."

Clearly, and with common sense, define what constitutes "repair" vs. "maintenance"

"Replacement of equipment due to normal wear or the end of its duty cycle should be considered maintenance and not subject to PWA."

Updated GREET model should be published as soon as possible

"Removal by Congress of unscientific indirect land use changes (ILUC) penalties as part of the emissions rate calculations was a big win for American farmers. However, this removal is effectively hollow until the updated model is published."

Harness farmers to the drive for American Energy Dominance

"IRS should work with the Department of Agriculture to finalize regenerative ag practices that will reduce the emissions rate for renewable fuels production facilities."

Fairly treat all renewable fuels production business models

"Final 45Z rules should recognize that various business models and marketing relationships are common and well-established… An entity producing at a facility via a tolling agreement should be eligible to claim 45Z."

To read IRFA's full comments, click here .

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The Iowa Renewable Fuels Association represents the state's liquid renewable fuels industry and works to foster its growth. Iowa is the nation's leader in renewable fuels production with 42 ethanol refineries capable of producing over 5 billion gallons annually - including 34 million gallons of annual cellulosic ethanol production capacity - and 8 biodiesel facilities with the capacity to produce 408 million gallons annually. For more information, visit the Iowa Renewable Fuels Association website at: www.IowaRFA.org .