Company: REX
Filing Date: 2025-06-04
Form Type: 10-Q
Source: 0000930413-25-001941
Chunk: 31

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-06-04
Form: 10-Q
Item: Part I, Item 1
Chunk 31
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 be treated as making a payment against tax for 100% of the value of the 45Q credit (“direct pay”)
for the first five years, starting with the year a qualifying carbon sequestration facility is placed in service, but not beyond
December 31, 2032. Companies may elect either the 45Q credit or the 45Z credit in periods in which both tax credits are available.
Other potential impacts include (a) extending the biodiesel tax credit, which could impact our renewable corn oil values, as this
co-product serves as a low-carbon feedstock for renewable diesel and biomass based diesel production; (b) creating a new tax credit
for synthetic aviation fuel; (c) funding biofuel refueling infrastructure which could impact the availability of higher level
ethanol blended fuel; and (d) provision for production and purchase credits for electric vehicles, which could impact the amount
of internal combustion engines on the road over time, and ultimately reduce the demand for gasoline, diesel fuels and ethanol.

The U.S. Congress is considering a budget and policy bill which, as initially passed by the House of Representatives, includes proposed amendments to the Inflation and Reduction Act.  While there is no certainty at this time as to what will be included in any final legislation that actually becomes law, we are closely monitoring any changes to sections 45Q and 45Z of the Internal Revenue Code that could impact the economics of our carbon capture and sequestration project.

In January 2025, the USDA released an interim
rule on 45Z tax credits titled “Technical Guidelines for Climate-Smart Agriculture Crops Used as Biofuel Feedstocks”,
or “CSA rule”. The rule helps to connect CSA practices used in the production of feedstock crops with reductions in
the carbon footprint of the biofuels industries, laying out how practices that reduce greenhouse gas emissions or sequester carbon
will be scored, on a county-by-county basis. These practices include no-till planting, cover crops and nitrogen inhibitors, which
may be measured individually, rather than requiring bundling of practices. The interim rule is subject to a 60-day comment period
with final resolution to be determined by the Trump administration.

Illinois Senate Bill 3968 was introduced
during the 2024 legislative session and assigned to the Senate Executive Committee. The bill proposed banning carbon sequestration
projects located over, under, or through a sole-source aquifer, including the three adjacent watersheds that