bio fuel with Jacque Fatka from Co bank in Kansas City

We were talking about the 35Z models with Jack Wifatka from Cold Bank on back roads of Illinois and Kansas City. Jack we, how you feel about the 35Z models with the second Trump administration.

The 45Z is supposed to start January 1, and we're waiting to see what kind of final work may come out of the Biden administration. I'm not holding my breath that we're going to see 45Z guidance before the current administration leaves and Trump comes in. If we do see something, it might be some safe harbor guidance, which basically would allow things to maybe

Give a little guidance, but not the full guidance and allow some retroactive if the Trump administration wants to come in and make some changes to that coming into 2025. But I think a lot of uncertainty on that. We may need to see an extension of the BioDiesel, the Blender's tax credit that we're used to in that space. How are things with the biofuels sector with that?

You know, right now we're actually seeing some biodiesel producers say that they are stopping the purchase of feed stocks because they just don't know what to pay for it. If you've got a dollar tax credit today, but you don't know what your tax credit is going to be based on rules come January 1, it's hard to be able to price that and some of them you could be losing 90 cents per gallon.

So we're definitely operating in some uncertain times as we head towards January 1. Just in a broader sense to you, I think biofuels, we've seen some good things come on the ethanol export side. But also this Trump administration, there's going to be some things we're going to have to watch from the new administration as they come in. There's a lot of small refinery exemptions that are waiting in the corridors waiting to be looked upon and could actually roll back demand as well as

The next level of the RFS, the renewable volume obligation set for 2026 through 2029. What is the production for a safe, great program for next couple months until March?

Well, the SAF greet is technically, the 45Z is supposed to have an updated greet model. And for those that are trying to understand what's the greet model, it's basically what allows us to get that CI score. The 45Z program is specifically targeted to help encourage the reduction of emissions through the fuel, the higher reduction in emissions, the higher tax credit you've got.

So we're waiting to see if the updated greet from USDA will give greater credit for the climate smart practices that farmers are incorporating on their farm. What we saw from the 40B did not really give a very full value, a very large value to encourage enough changes at the farm level to really make it worth it. So we're hoping you know USDA has been very involved in this even though this is a Department of Treasury tax incentive. USDA has been trying to offer their insight so

Maybe we'll see something on that. You know, Vilsack and his team at USDA has really been trying to solicit some information on that to help lay that groundwork, but times running out. We may not get there.

Cobank does studies of cooking oil from China. So, Cobank doesn't actually, we haven't done any specific studies. I will say USDA had a gained report out in August. There's been a lot of concern about whether the used cooking oil that's coming into the US is actually used cooking oil or if it's just heated palm oil.

Really, what was kind of buried in that gain report of August from USDA was that China is sending us their used cooking oil, but they're only sending us about half of what they could. There's actually way more potential for them to send even more. They are also building up their own SAF industry, and they will continue to build up their SAF industry and probably use more of their used cooking oil at home.

As we also incorporate this clean fuel production tax credit, the 45Z, that is supposed to encourage domestic production of fuel. So there should be opportunities for the Trump administration to maybe make some tweaks to that to encourage the domestic feed stocks, which obviously China, UCO, would not be part of that, or it would be penalized for the fact that it's coming on about coming over here, not able to capture maybe as large of a tax incentive as a UCO that would be produced here in the U.S.

What is the production for that on jet fuel from major airlines? You know, we have worldwide only about 0.17% under 0.2% of sustainable aviation fuel in the worldwide use today. So just a drop in the bucket, literally, tiny, tiny drop. But the EU will be moving to a 2% market mandate for SAF coming in next year.

So they're pushing to have that inclusion increased steadily over the next decade as well. So there will be a greater adoption rate as we have these market mandates from some countries around the world. Do you have any final thoughts or recap of our conversation?

Obviously, there's optimism in the sustainable aviation fuel, but unfortunately, as you look at the short-term opportunities, they're pretty minimal. But there's opportunities to really help us grow our understanding, improve efficiencies, hopefully reduce the cost at the end of the day so that we can continue to build out a new demand base that can bring some extra value back to rural America. Thanks, Jack. We enjoy our conversation.

It's really great to be with you in person here in Kansas City. Great to meet you after our many times talking together. I am Cesar Delgado with Jack Wifatka from Cold Bank on back roads of Illinois in Kansas City.