Biden Administration will not finalize the clean fuel tax credit guidelines
Three sources have confirmed that Biden administration officials won't finalize the highly anticipated guidelines for new clean fuel production credits targeted at the airline industry and biofuel industries by the time they depart in January. This casts doubt on the future success of this key part of the U.S. President's climate agenda.
The tax credit was to go into effect on Jan. 1 but, due to a lack detailed guidelines from the U.S. Treasury, it would have been rendered dormant. The global emissions of greenhouse gases from air travel are around 2.5%, which makes it an important target in the fight to combat climate change.
The Treasury Department reiterated on Tuesday its previous commitments and said that the agency expects to issue guidance before January 20th, which will allow producers to access credit in 2025.
Biofuel companies, along with their legislators, hoped to have the program finalized before Biden leaves the White House in January. They believed that a fully-developed program would offer some protection from President-elect Donald Trump vowing to repeal Biden’s 2022 Inflation Reduction Act which started the program. In particular, ethanol producers are hoping that sustainable aviation fuels can provide growth to the market. This is due to a stagnant demand for corn-based fuels as gasoline additives.
U.S. Senator Chuck Grassley warned that delaying the guidance could disrupt the biofuels sector and promised a new approach to Farm Belt Politics once Republicans are in power next year.
"The Biden administration's climate agenda prioritized pet project for coastal elites & has left middle America at every turn. That ends next year when Republicans are in power," Grassley stated on the X Platform.
According to interviews with several industry executives, the biofuel industry has pushed lawmakers to extend the existing blender tax credit that was set to expire by the end of this year in order to deal with uncertainty.
The White House did not respond when asked for comment. It is leading a large effort to finalize the list of climate rules that are still unfinished.
Has previously reported that the delay in developing guidelines for sustainable aviation is due to policy discussions between agriculture lobbyists, and environmentalists about how to make sure the program achieves its climate goals.
Sources said that the Department of Agriculture will issue guidelines on which farming techniques are eligible for the credit. However, other items, such as the life cycle analysis, necessary to determine the credit's value, remain incomplete. Reporting by Jarrett Renshaw, Editing by Deepa Babyington and Lisa Shumaker
(source: Reuters)
