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Shining Light on Farm & Food Policy for 20 Years.
Thursday, December 19, 2024
The California Air Resources Board has approved a 20% limit on credits for renewable diesel produced from soybean, canola and sunflower oils, despite industry complaints that the cap was unnecessary and would increase the state's reliance on foreign feedstocks for biofuels.
A bipartisan group of lawmakers are proposing to extend the new 45Z tax credit for low-carbon biofuels for 10 years but restrict the incentive to products derived from domestic feedstocks, such as vegetable oils and corn ethanol.
The California Air Resources Board’s proposed restrictions on biofuel feedstocks, including a limit on soybean oil usage and new sustainability certification requirements, will ultimately backfire on the state’s consumers, according to industry groups.
The California Air Resources Board is proposing to cap the amount of renewable diesel made from soybean or canola oil that would qualify for the state’s low carbon fuel standard.
The rising demand for renewable fuel and subsequent tax credits to incentivize production has led to a significant spike in imported feedstocks like used cooking oil and tallow, which some say could undermine the domestic oilseed industry and potentially allows some fraudulent materials to enter the market.
The renewable diesel boom driven by a slate of federal and state policies has brought with it a surge in demand for imports of animal fats and vegetable oils to be used as feedstocks that could continue growing in 2025 as tax credits shift to incentivize in-country production of the fuel.
Global prices for food commodities fell last month and ended the year 10% below their level in December 2022, the UN Food and Agriculture Organization reported Friday.
The USDA’s Economic Research Service on Thursday lowered its forecast for U.S. agricultural exports in fiscal year 2024 to $169.5 billion. That’s down $2.5 billion from USDA’s previous forecast in August and down $9.2 billion from exports in FY 2023.
Leaders of U.S. agribusiness giants expect the farm economy to remain relatively strong through next year despite higher interest rates and softening commodity markets.
The biofuel industry is growing optimistic that a broad range of agricultural feedstocks, including soybean oil, will be eligible for a valuable new tax credit that’s intended to stimulate production of sustainable aviation fuel.
