(WASHINGTON D.C.) — As the Trump Administration works to finalize the 45Z Clean Fuel Production Credit, numerous biofuel groups have submitted comments to the U.S. Treasury and Internal Revenue Service (IRS) outlining recommendations for the implementation of the Section 45Z clean fuel production tax credit, as enhanced and extended by the One Big Beautiful Bill (OBBB).
“Treasury has done an outstanding job of collecting feedback from all relevant stakeholders, and we applaud their commitment to implementing 45Z in a way that ultimately maximizes the credit’s economic benefits,” said Growth Energy CEO Emily Skor. “With the right guidance, including flexible guidelines for farmers seeking to adopt innovative practices, 45Z can accelerate U.S. energy leadership and unlock billions of dollars in new investments across rural America. We look forward to Treasury’s final ruling that will give farmers and biofuel producers the certainty they need to expand access to more affordable fuel options.”
Kurt Kovarik, Clean Fuels’ Vice President of Federal Affairs, said in a news release that, “Producers greatly appreciate the clarifications and reliance clauses that Treasury provided in this proposed rule. They are grateful that Congress adopted additional changes to the 45Z credit through the One Big Beautiful Bill. But the 45Z tax credit came into effect in January 2025 without sufficient industry guidance. Producers are asking for certainty that Treasury’s new proposal applies to sales in 2025. Increased certainty will help achieve Congress’ goals of producing more domestic energy and supporting farmers with domestic market opportunities.”
Over at the Renewable Fuels Association, they say U.S. Department of Treasury has made “meaningful progress” in developing rules implementing the Section 45Z Clean Fuel Production Credit, but several aspects of the regulations need additional clarity and refinement, according to their comments submitted to Treasury.
RFA say the top priority for Treasury should be releasing an updated 45ZCF-GREET model as soon as possible. The model is used by ethanol producers to determine the lifecycle “emissions rate” of their fuel, which ultimately establishes the value of the 45Z tax credit.
“If effectively implemented, the 45Z tax credit has the potential to stimulate domestic energy production, strengthen U.S. energy security, bolster rural economies, and support increased investment and innovation in the renewable fuels and agriculture sectors,” wrote RFA President and CEO Geoff Cooper. “The technology-neutral structure of 45Z is a crucial feature, allowing clean fuel producers to pursue the most economically efficient and practical pathways for reducing emissions and boosting domestic energy production.”
In written comments, American Coalition for Ethanol CEO Brian Jennings underscored the significant financial pressure facing rural America and that enabling farmers and producers to benefit from low-carbon practices is critical to unlocking the full value of the 45Z credit.
“Since farming practices represent about half of ethanol’s carbon intensity, clean fuel producers must have the opportunity to monetize low-carbon farming practices such as reduced tillage or precision fertilizer use to fully unlock the value of 45Z.”
ACE noted that if these practices are fully recognized, the economic impact could be substantial.
“If Treasury allows low-carbon farming practices to qualify towards emissions rates it could mean billions of dollars annually for clean fuel producers and farmers, providing a market-based opportunity to dramatically increase rural and farm income.”
Jennings expressed support for elements of the proposed rule, including the use of modeling tools such as the U.S. Department of Agriculture’s (USDA’s) Feedstock Carbon Intensity Calculator (FD-CIC) and Department of Energy’s (DOE’s) 45ZCF-GREET model, while stressing the importance of keeping them current with the latest science and real-world data supported through activities such as the USDA Regional Conservation Partnership Program (RCPP) activity being led by ACE and specifically designed to address information gaps regarding the low-carbon benefits of farming practices to help improve the accuracy of modeling tools.
NATSO, representing truck stops and travel centers, SIGMA: America’s Leading Fuel Marketers, and the National Association of Convenience Stores (NACS), also filed public comments with the Department of Treasury and the Internal Revenue Service on the proposed rule for the “Section 45Z” Clean Fuel Production Credit. They said in part that “the real-world implications on American energy supplies and the price that consumers pay at the pump should serve as the regulatory North Star of biofuel policy. Gasoline prices are one of the most visible, tangible ways consumers experience inflation in the U.S. economy. Higher diesel costs also raise the price of food, medicine and everyday household goods transported by truck as motor carriers experience higher operating costs. The ‘45Z’ Credit is not alleviating these affordability challenges for American consumers and businesses. It has not helped American consumers by lowering fuel prices and it has not helped American farmers by increasing sales of corn or soybeans used to produce renewable fuels.”
