Yesterday, Trump, by executive order, suspended all federal funding under the IRA legislative package, as he promised during his campaign. This includes, among other things, 45Z support for biofuels. I’m not entirely sure what happens if, for example, Neste now applies for the 45Z tax credit on its federal tax return; the tax authority might simply not grant it because there is no funding (?). In any case, companies are entitled to these, so the companies’ next step will likely be to sue the federal government and collect these tax receivables through legal means if the funding freeze is prolonged. In any case, the cash flow problem for biofuel producers will likely become topical again as a result of the situation. Trump’s next promised step would be the repeal of the IRA law itself through Congress. Previously, it was estimated that a partial repeal of the IRA would perhaps be a more likely scenario than the entire package. Bloomberg had such a colorful scenario map, from which one can read that positive scenarios for foreign biofuels (Neste) would be the repeal of all tax subsidies or the continuation of the old BTC support (40A extension):
