Biodiesel producers are still working out how the 45Z Clean Fuel Production Tax Credit will pay off for them and for soybean growers, according to Clean Fuels Alliance America CEO Donnell Rehagen.

The credit, which replaced the blender's credit structure, rewards fuel producers based on the carbon intensity of their feedstock and production process. That design puts a premium on documenting practices all the way back to the farm — a task that has proven more straightforward for ethanol than for biodiesel and renewable diesel.

"It's a lot easier for an ethanol plant to work directly with a farmer to say if you do A, B, and C, we'll pay you for it," Rehagen told Brownfield. Ethanol plants buy corn from a defined set of growers and can contract for specific agronomic practices — cover crops, reduced tillage, precision nitrogen — that lower the fuel's carbon score and, with it, boost the credit's value.

Biodiesel and renewable diesel producers face a more complicated chain. Soybean crushing, oil extraction, and transport each add steps between the field and the fuel plant, and it remains unclear how growers can capture a share of the credit for climate-smart practices embedded in the bean. Rehagen said his industry is playing catch-up on building those supply-chain arrangements.

For soybean growers, the stakes are real. Biodiesel and renewable diesel demand has become a major source of soybean oil consumption, and any mechanism that channels 45Z value back to the farm gate would function as a new form of demand-driven revenue. Whether that value reaches growers depends on how cleanly the credit's carbon-intensity accounting can trace practices through crushers and refiners.

Rehagen's assessment signals that the policy's benefits are landing unevenly across biofuel sectors in its early implementation. Ethanol plants, with shorter supply chains and established grower relationships, are moving faster to structure contracts that monetize the credit. Biodiesel producers are still sorting out the mechanics.

The uncertainty comes at a sensitive moment for the sector. Feedstock costs dominate biodiesel margins, and producers need clarity on credit valuation before they can offer growers firm premiums for lower-carbon beans. Until those contracts take shape, much of the 45Z upside for soybean country remains theoretical.

Rehagen indicated the industry's work now centers on closing that gap and giving soybean growers a workable pathway into the credit's benefits.