Senate Improves 45Z Clean Fuel Production Credit, Prioritizing American Farmers and Feedstocks

WASHINGTON, June 28, 2025 – Today the Senate released legislative text with modifications to the 45Z Clean Fuel Production Credit as a part of the legislation titled, “The One, Big, Beautiful Bill ”. The revised credit maintains the House-passed requirement that only North American feedstocks can benefit from the credit, disqualifying imported feedstocks such as Chinese ‘UCO’ and South American tallow from receiving U.S. taxpayer support.

Since 2021, the soy crush industry has invested over $6 billion in rural America and expanded processing capacity by over 25% to meet the demand for continued growth in the domestic biofuels market. The modified credit reinforces this momentum to revitalize rural America by encouraging domestic production of biofuels, limiting feedstocks, including soy and canola, to those grown and produced in North America.

The Senate also included the elimination of the indirect land use change (ILUC) penalty, an arbitrary and outdated tariff on U.S. farmers, which helps level the playing field for soybean and canola growers. Phasing out ILUC ensures emissions calculations are based on real-world environmental data, not flawed theoretical models that serve only to burden the individuals feeding and fueling our country. The Senate bill also expanded the Small Agri-Biodiesel Producer credit to 20 cents per gallon and allows for transferability of the 45Z credit, ensuring smaller biofuel producers can participate.

Soybean producers and processors have championed these comprehensive revisions to the 45Z Clean Fuel Production Credit that will ensure the tax credit protects domestically grown agricultural feedstocks and removes the federal incentives for imported waste feedstocks flooding the market.

“NOPA applauds the Senate for prioritizing American farmers and U.S. energy dominance,” said Devin Mogler, President and CEO of NOPA, “Maintaining and improving upon the House-passed language ensures that tax policy is aligned with the broader policy goals of supporting our farmers and producers over foreign actors. The soy crushing sector has made the investments to supply the feedstocks necessary to achieve higher RVOs and continue to strengthen U.S. energy dominance.”

“Soybean farmers have long advocated for biofuel tax credits that put American farmers and our rural economies first, and ASA commends the Senate for their continued commitment to U.S. agriculture,” said American Soybean Association President Caleb Ragland, who grows soy in Kentucky. “As we continue to advocate for new and expanded markets for U.S. soy, the work of the House and Senate will support the farm economy by bolstering a vital domestic market for our farmers.”

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The American Soybean Association (ASA) represents U.S. soybean farmers on domestic and international policy issues important to the soybean industry. ASA has 26 affiliated state associations representing 30 soybean-producing states and nearly 500,000 soybean farmers. More information at www.SOYGROWERS.org

Organized in 1930, the National Oilseed Processors Association (NOPA) represents the U.S. soybean, canola, flaxseed, safflower seed, and sunflower seed-crushing industries. NOPA’s membership is engaged in the processing of oilseeds for meal and oil that are utilized in the manufacturing of food, feed, renewable fuels, and industrial products. NOPA’s 18 member companies operate over 68 softseed and soybean solvent extraction plants across 20 states, crushing over 95% of all soybeans processed in the United States, the equivalent to more than 2 billion bushels annually. More information at www.NOPA.org

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