Clear Tax Rules Could Unlock Farm Investment

Federal tax clarity can help to promote the adoption of new agricultural methods while simultaneously aiding the energy needs of the country.

This is the main message that Emily Skor, CEO of Growth Energy, is trying to communicate through her commentary in Ethanol Producer Magazine dated August 10, 2026. The adoption of 45Z Clean Fuel Production Credit requires taking into consideration innovations made on the farm as well as at the biofuel production plants.

This clean fuel credit is intended to reward low-carbon emission fuels. Various industry organizations have been urging the U.S. Treasury and the Internal Revenue Service to provide rules regarding 45Z Clean Fuel Production Credit.

Farming Practices Can Affect Fuel Value

Another problem is the inclusion of agriculture practices in the calculation of the carbon intensity of biofuels.

The adoption of fertilizer use efficiency practices, emission reduction practices, or practices related to improved soil management or resource efficiency may help decrease the carbon intensity of biofuel feedstocks.

It is claimed by the proponents of the industry that there must be an opportunity for farmers to earn some money from implementing those practices.

In the past, Growth Energy has asked the Treasury to make the 45Z guidelines flexible enough to allow the recognition of a variety of agricultural advances.

45Z Could Support Rural Economies

This credit is also seen as an additional way to attract new investments from farmers, ethanol manufacturers, and other agricultural businesses.

According to Growth Energy, proper guidance on 45Z can help increase the pace of energy production in the country and give birth to new economic opportunities in rural areas. The organization stated that biofuels producers were ready to make investments in technology and processes reducing carbon emissions, provided there was enough certainty in the political environment.

The general political situation is also developing. The 45Z credit was established in the context of the Inflation Reduction Act, which was later modified by the One Big Beautiful Bill Act. With this modification, the credit was extended till 2029 and its calculation mechanism changed as well.

Agriculture and Energy Policy Are Increasingly Connected

This discussion on 45Z is an example of a more widespread transformation within the U.S. energy sector. The agricultural sector is becoming an integral part of America’s efforts to produce fuels with reduced carbon emissions.

For farmers, certainty in tax policy would help them in their decision-making process regarding equipment purchases and new farming techniques. For ethanol plants, increased involvement from farmers would mean that the latter would provide them with low-carbon feedstocks.

In other words, Skor's reasoning goes beyond the field of tax policies; she is trying to establish a link between innovation and investment in the agricultural sector, and U.S. energy security.