Representatives of the U.S. biofuels industry on April 10 submitted comments to the U.S. Department of Treasury and Internal Revenue Service providing recommendations on how to best implement upcoming 45Z clean fuel production credit regulations. 

The Section 45Z credit, established by the Inflation Reduction Act, aims to incentivize the production of transportation fuels with lifecycle greenhouse gas (GHG) emissions levels below certain levels. It provides a per-gallon (or gallon-equivalent) tax credit for producers of clean transportation fuels based on the CI of production. 

The credit is currently in place for 2025-2027. For facilities that meet prevailing wage and apprenticeship requirements, the value of the credit is up to $1 per gallon for non-aviation fuel and up to $1.75 per gallon for sustainable aviation fuel (SAF). The base credit for facilities that do not meet prevailing wage and apprenticeship requirements is 20 cents per gallon and 35 cents per gallon, respectively. 

Treasury and the IRS in January published a notice of intent to propose 45Z regulations and a notice providing the annual emission rate table for the credit. Public comment periods on both notices were open through April 10. 

The Renewable Fuels Association stressed that 45Z regulations need clarity, certainty and stability. “If properly implemented, the 45Z tax credit has the potential to advance U.S. energy security, prioritize domestic energy resources, strengthen rural economies, and create a transformative incentive for the adoption of new technologies in the renewable fuels and agriculture sectors,” wrote Geoff Cooper, president and CEO of the RFA. “The technology-neutral intent of 45Z represents the most economically efficient and environmentally responsible approach to boosting U.S. energy production. However, for the 45Z program to truly drive innovation and value creation in the marketplace, Treasury must move expeditiously to propose, finalize, and promulgate implementing regulations. Clean fuel producers, including RFA’s members, are in desperate need of clarity, certainty, and stability in the regulatory framework supporting the 45Z tax credit.”

Cooper added that RFA believes the final 45Z regulations must recognize the realities of today’s biorefining and agriculture sectors and the complexities of our nation’s transportation fuels marketplace. At the same time, final regulations must maintain an intuitive and manageable approach to registration, reporting, and recordkeeping that creates the kind of dependable value that empowers businesses to invest.

The American Coalition for Ethanol is urging swift and science-based implementation of the 45Z credit. “The 45Z credit not only promotes U.S. energy security … but can also create good-paying jobs and unlock new markets for farmers and domestic biofuel producers,” wrote Brian Jennings, CEO of ACE. 

ACE’s comments explain that the value of U.S. corn production has fallen, and input costs have risen. The group cites National Corn Growers Association data that farmers are forecast to experience their third consecutive year of net profit losses in 2025, projected to lose more than $160 per acre on average.

“Treasury should rapidly finalize 45Z guidance and include the technical guidelines for biofuel crops and carbon intensity calculator developed by USDA in the final 45Z rules, so ethanol producers and farmers can unlock new market opportunities,” Jennings added.

Growth Energy called on Treasury to implement changes that would unleash U.S. energy production and unlock investments needed to restore the rural economy. “The Trump administration has an important opportunity to give farmers and biofuel producers the freedom and flexibility to dominate clean fuel markets around the world and ensure that America wins the global race for the future of the skies,” said Emily Skor, CEO of Growth Energy. “The previous administration passed on making 45Z an economic engine for rural America, but this U.S. Treasury could unleash billions of dollars of investment in America’s farm economy. We’re grateful to the Trump administration for taking a fresh look at 45Z, and we urge regulators to move quickly to restore our competitive edge across the heartland.”

Clean Fuels Alliance America urged Treasury to ensure a level playing field for U.S. farmers and adhere to legislative language indicating that co-processed fuels do not apply for the credit. “With the §45Z credit already in effect, the clean fuels industry appreciates clarity on related implementation issues through either guidance and/or rulemaking,” Clean Fuels wrote.

Kurt Kovarik, vice president of federal affairs at Clean Fuels, added, “Biofuels are essential to U.S. farm security. The unfinished rules for the Clean Fuel Production Credit are creating intolerable uncertainty for U.S. farmers and biodiesel and renewable diesel producers, putting jobs, economic opportunity, and growth in domestic energy production at risk. Clean Fuels asks that Treasury and Congress level the playing field for farmers and fuel producers, supporting continued growth and innovation in domestic energy production.”