U.S. farm agency seeks input on climate-friendly farm practices for biofuel tax credit

By Leah Douglas

June 26 (Reuters) - Farmers and biofuel producers should tell the U.S. Department of Agriculture in the next 30 days how to improve its assessment of climate-friendly farm practices as the administration finalizes a clean fuels tax credit program set to take effect in 2025, Agriculture Secretary Tom Vilsack said on Wednesday.

The Biden administration hopes to drive down transportation emissions in part by incentivizing farmers whose crops are used for biofuels to use climate-friendly farming techniques that store carbon in the soil.

Guidance for a sustainable aviation fuel tax credit released by the Treasury Department in April disappointed some farm and biofuel groups for requiring farmers to bundle a set of three climate-friendly practices, a standard few farmers can meet.

“I’ll be the first to admit, and you will be the first to tell me, that (the SAF guidance) was not perfect,” Vilsack said at a meeting of the Clean Fuels Alliance America.

The USDA is soliciting comments for 30 days on how its approach to climate-friendly farm practices should be modified as the administration works on its guidance for the clean fuel tax credit. That credit will replace several other low emission fuel credits, include the one for SAF, beginning in 2025.

Vilsack said that guidance could, for instance, adjust the bundling requirements, depending on the content of comments.

“We heard it’s not reflective of how farmers operate,” he said.

Vilsack also said he hopes that the rules will be completed in the fall in time for farmers to make planting decisions for the following year, though noted the Treasury Department will ultimately release the rule.

(Reporting by Leah Douglas; Editing by Alistair Bell)