Today could be a big day for the biofuel industry. The Treasury Department is expected to release highly anticipated interim guidance for the valuable new clean fuel tax credit known as 45Z, industry sources say.
The guidance will be used to determine eligibility for the tax incentive for sustainable aviation fuel and other products. However, it will ultimately be up to the incoming Trump administration to finalize the requirements.
Keep in mind: The credit took effect on Jan. 1 to replace previous biofuel subsidies. The delay in formal Treasury guidance has caused some scaleback in production.
By the way: In conversations with Trump administration nominees, including the president-elect’s pick for ag secretary, Brooke Rollins, Sen. Jerry Moran, R-Kan., said he’s stressing the importance of renewable fuels to the well-being of agriculture. “If we lose markets in a tariff battle … all the more reason that we need to have every other market that we can have, and renewable fuels is and can become an even greater proportion of what we do with what we produce,” Moran told Agri-Pulse Thursday.
Rep. Dusty Johnson, R-S.D., told Agri-Pulse President-elect Donald Trump supports American energy and understands the value of agriculture-based energy. However, Trump is “rightfully” going to want to engage with House Republicans to “rip a lot of the bad policy up,” he continued.
House Republicans introduce bill to facilitate Trump’s Panama Canal purchase
A group of House Republicans led by South Dakota’s Rep. Dusty Johnson has introduced a bill to authorize the purchase of the Panama Canal, citing Trump’s interest in returning it to U.S. ownership.
During a lengthy news conference at Mar-a-Lago this week, Trump claimed the U.S. needs the canal to bolster its “economic security.”
“President Trump is right to consider repurchasing the Panama Canal,” Johnson said in a statement announcing the bill. He also echoed Trump, arguing that growing Chinese “interest and presence” around the canal is cause for concern.
Keep in mind: The canal is fully owned by the Republic of Panama. Chinese companies have been involved in specific infrastructure contracts in and around the canal and concession deals at nearby ports. The U.S. is the canal’s biggest user. Around 70% of the annual shipments that go through the canal come from or go to U.S. ports – including around 600 million bushels of U.S. soybeans.
Take note: The U.S. reserves the right to use military force to defend the canal’s neutrality. But Mike Steenhoek, executive director of the Soy Transportation Coalition, says he’s seen no sign of Panama favoring any single country’s ships.
“The Panamanians have done a very credible job in maintaining and improving the canal and its operations," Steenhoek told Agri-Pulse Thursday. He doesn’t anticipate any disruptions to U.S. producers’ use of the canal stemming from Trump’s rhetoric or future negotiations.
Rollins hearing likely delayed
Brooke Rollins’ confirmation hearing may slip past next Wednesday, the targeted date. Senate Agriculture Committee Chair John Boozman, R-Ark., said Thursday the panel doesn’t have all the paperwork it needs from her.
"It's just hard to get everything together,” Boozman said. But, he added, the committee is “working with her, working with the transition team ... we're moving in the right direction."
Asked if Democrats were seeking additional documentation, Boozman said, “Sen. Klobuchar and her staff are being very, very cooperative.” Amy Klobuchar, D-Minn., is the committee’s new ranking member.
RFK Jr.: Hill visits are going “terrific”
Trump’s nominee to lead the Department of Health and Human Services, Robert F. Kennedy Jr., continued to meet with Senate Republicans and some Democrats this week.
Sen. Chuck Grassley, R-Iowa, who has been skeptical of Kennedy given some of his comments on agriculture and pesticides, said the nominee was “much more reasonable” than he expected. Senate Agriculture Committee Chair John Boozman, R-Ark., also indicated the meeting was productive, but both Republicans opted to wait until Kennedy’s confirmation hearing to make a final decision on their support.
Top economist doubts Trump can hit deficit reduction target
Goldman Sachs’ chief economist is doubtful the incoming administration can meet its steep targets for reducing the U.S. budget deficit.
Trump’s pick for Treasury secretary, Scott Bessent, has a plan dubbed “3-3-3” to slash the deficit, boost economic growth and spur U.S. energy production. The plan aims to reduce the deficit to 3% of GDP, achieve 3% annual GDP growth and lift U.S. energy production to 3 million barrels of oil per day.
In 2023 the federal budget deficit was above 6%. “Maybe we can bring it down somewhat below 6,” Jan Hatzius said. “It's going to be very difficult to get down to 3%.”
Final word
“We need to be recognizing that there is a paradigm shift. In the markets where we do business, the population is declining. That has implications on food consumption and that has implications on population age, so many trickle-down effects will impact agriculture.” — John Newton, former GOP Senate Ag Committee economist and current executive head of Terrain.
He discusses the farm economy in 2025 and how ag exports may be forced to adjust in the future on the next episode of Agri-Pulse Newsmakers, available today at Agri-Pulse.com.
For more news, go to www.Agri-Pulse.com.
