Today, Green Scissors — a coalition of free-market, taxpayer and environmental groups — sent a letter to Congress urging against a proposed expansion of the 45Z Clean Fuels Production Tax Credit. The House Ways and Means Committee’s budget reconciliation bill proposed extending this biofuel subsidy and significantly loosening eligibility requirements.
The bill proposes extending the tax credit through 2031 and excluding emissions from indirect land-use changes from the credit’s lifecycle emissions requirement. These emissions can be significant, as incentives for biofuels can spur the conversion of carbon rich grasslands and wetlands into corn and soy crops that are only grown to capture the subsidy. The letter warns that these changes will exacerbate the inflationary pressure on American consumers and potentially add billions to our national debt.