Biden administration will not finalize clean fuel tax credit guidance

Biden administration officials will not finalize highly anticipated guidelines on new clean fuel production tax credits aimed at the airline and biofuel industries before they leave in January, three sources told Reuters, casting doubt on the future of a key piece of the U.S. president’s climate agenda. The tax credit, the engine behind President Joe Biden’s ambitious plan to generate 3b gallons in production of sustainable aviation fuels by 2030, was due to become effective Jan. 1, but a lack of detailed guidance from the US Treasury would render the program dormant. Air travel contributes around 2.5% of global greenhouse gas emissions, making it a big target in the fight against climate change. The Treasury Department on Tuesday reiterated its previous commitments, saying the agency anticipates issuing guidance before Jan. 20 that will enable producers to access the credit in 2025. Biofuel companies and their legislative backers were hoping to have a finalized program in place before Biden departs the White House on Jan. 20. They said they believed a complete program would provide some protection against President-elect Donald Trump's vow to repeal Biden's 2022 Inflation Reduction Act, which launched the program. Ethanol producers in particular are hoping sustainable aviation fuels will provide market growth, amid stagnant demand for the corn-based fuel as a gasoline additive. U.S. Senator Chuck Grassley said delaying the guidance would be disruptive to the biofuels industry and vowed a different approach to Farm Belt politics once Republicans take over next year.<br/>