This blog examines how proposed changes to the 45Z Clean Fuel Production Credit under the One Big Beautiful Bill may reshape incentives in U.S. biofuel markets. Comparing House and Senate proposals, we focus on three key changes: extending the credit’s duration, restricting eligible feedstocks to North America, and removing indirect land-use change (ILUC) emissions from carbon intensity calculations. While these revisions strengthen the competitiveness of domestic ethanol and soy-based renewable diesel, they also raise concerns about investment certainty, exclusion of foreign suppliers, and weakened environmental accounting.
Gammans et al. (Wed,) studied this question.