After much delay, the U.S. Treasury and IRS released overdue initial guidance on the 45Z Clean Fuel Production Credit on January 10. The Treasury issued two notices with details on the new tax incentive: draft rules that the agency intends to propose and a table of eligible fuels and feedstock combinations, which includes biodiesel, renewable diesel, SAF and co-product fuels such as naphtha and propane, as well as most domestic feedstocks. The carbon intensity scores for the fuel and feedstock combinations that companies can use to calculate the credit’s value are calculated using the 45ZCF-GREET model published January 15. Rules to calculate additional credit values associated with Climate Smart Agriculture practices are not included in the draft rules, although USDA today published interim final rules for calculating carbon intensity reductions. Treasury is inviting comments on both the draft rules and table of eligible fuels by April 10.
Originally shared by Clean Fuels Alliance America, January 15, 2025.