Company: REX
Filing Date: 2025-12-04
Form Type: 10-Q
Source: 0000930413-25-003566
Chunk: 32

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-12-04
Form: 10-Q
Item: Part I, Item 1
Chunk 32
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 per year.

28

We continue to work to identify ways to reduce
our CI score at the One Earth plant with the intention of maximizing tax credits available under the IRA. The IRA created a new
Clean Fuel Production Credit under Section 45Z, originally available for calendar years 2025 – 2027 which, based on proposed
rulemaking by the United States Department of Treasury, will establish a tax credit that utilizes a sliding scale where credits can
be earned incrementally between $0.02 and $0.20, or $0.10 and $1.00 if prevailing wage requirements are met, per gallon of non-SAF
fuels based on an ethanol plant’s GHG reduction below a 50 CI score threshold, with the first two or ten cents earned upon
achieving a CI score below 47.5, to incentivize further increases in plant efficiencies within the industry. In July 2025, Congress
passed the OBBBA, which was subsequently signed into law by the President. The law extended the time period which 45Z credits can be
claimed by two years, through December 31, 2029. The U.S. Department of the Treasury has not yet issued final rules on qualification
for 45Z tax credits.

We currently budget capital expenditures
for both the expansion and sequestration projects at One Earth to be approximately $220 million to $230 million, subject to further
refinement as we move forward. We plan to pay for all expenditures from available cash. As of October 31, 2025, we had spent $58.1
million since inception toward the carbon sequestration project. If the carbon sequestration project is successful, we believe
we will qualify for tax credits under section 45Q, based on tons of carbon sequestered, and section 45Z, based on gallons of ethanol
produced, as outlined in the IRA and OBBBA. Companies may elect either the 45Q credit or the 45Z credit in periods in which both
tax credits are available. As of October 31, 2025, we had spent $97.7 million since inception and were contractually committed
to spend an additional $17.0 million toward plant capacity expansion and ongoing efforts to reduce our CI scoring at One Earth.

In May 2023, NuGen, our majority owned ethanol
plant in Marion, South Dakota, signed an agreement to be part of Summit Carbon Solutions’ carbon capture and storage