Mike Pearson takes a look at the 45Z tax credit that is tied to biofuels slated to go into effect in 2025.

The credit was included in the Inflation Reduction Act legislation and is designed to grow the biofuel industry.

The problem is that the U.S. Treasury Department has yet to release the guidance around the rule.

The information is expected to be released before Jan. 20.

The delay up until now has left the industry in limbo. The lack of rules has caused a lot of uncertainty in the ethanol industry.

The Renewable Fuels Association says the lack of rules has caused a lot of havoc in the industry. Even a safe harbor provision to help navigate early days of the program is not available yet creating uncertainty.

The stakes are high, the 45Z Z tax credit is designed to reward fuels with lower carbon footprints offering the highest tax credits to those biofuels and sustainable aviation fuel that meet the requirements.

The USDA has yet to release the complementary rule aimed at reducing climate smart practices carbon emissions and rewarding farmers that cut their carbon footprints.

United States Ag Secretary Tom Vilsack says he expects it to be released before the end of Biden's term as president. However, a timeline has not been released.

This delay increases the complications for feedstuff markets because they can't decide what to sell or what to purchase into the new year.

Related:Farm Progress America, Jan. 20, 2025

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Mike Pearson, farm broadcaster and host of This Week in Agribusiness.