NACS, along with NATSO, SIGMA, The American Trucking Associations (ATA), and The Truckload Carriers Association (TCA), sent a joint letter to the U.S. Treasury Department and the Internal Revenue Service in response to the agencies' notice of intent to propose regulations implementing the Section 45Z clean fuel production credit. The credit, adopted in 2022 as part of the Inflation Reduction Act (IRA), is meant to replace the Section 40A biodiesel blenders credit but has not been fully implemented by the agencies.

The associations’ letter states that "Though there are several ways that the 45Z Credit can be incrementally improved ... our industries have serious concerns that the broader transition away from the [40A Credit] to the 45Z Credit is inherently inflationary with respect to diesel fuel prices."

"The transition from 40A to 45Z is causing disastrous disruptions in the biofuels market, creating winners and losers at consumers' expense," said NACS Deputy General Counsel Matt Durand. "While Congress reexamines that policy choice going forward, NACS welcomes the opportunity to provide constructive feedback on how the Administration might best implement current law."

NACS and its cosigners also highlighted that "No stakeholders in the diesel fuel market are satisfied with the 45Z Credit as it exists today. It is complex, extraordinarily disadvantageous to certain feedstocks (e.g., soybeans), and has not lowered prices for consumers. To that end, Congress is actively considering changes to biofuel tax policy to rectify the damage to diesel markets wrought by the transition to the 45Z Credit."

The letter also states: "Regardless of any specific adjustments that are made to existing law, the Agencies should take care to ensure that the 45Z Credit—or any future iterations—does not continue to result in the volatility and chaos that biofuel markets are enduring today. That goal is best served by (i) ensuring that biofuel feedstocks flow to their most efficient use-case, and (ii) maximizing the extent to which consumers and end-users can access the 45Z Credit’s value via lower retail fuel prices."

Earlier this month, NACS joined NATSO and SIGMA in a letter to EPA Administrator Lee Zeldin, which noted that "Our members have grave concerns that setting volumes for total advanced biofuel at levels that the market is unable to economically absorb will result in steep increases in [RIN] prices and, by extension, in the retail price of diesel. Unrealistic mandates, particularly when they are not paired with the relief that the [40A Credit] could help provide, would be destructive of the market and impose palpable inflationary pressures that will hit American consumers directly in their wallets every time they buy virtually any good in the nation."

The letter noted that fuel retailers support policies that enhance energy independence and support abundant, stable energy sources and that biofuels represent a key component of ensuring a stable fuel supply. Extending the $1 per gallon 40A Credit would restore certainty in the biofuels market, which has entered a production crisis, threatening supplies.