Clean Fuels Alliance welcomes Treasury’s proposed rules for the 45Z tax credit
In Washington, Clean Fuels Alliance America recently welcomed Treasury’s proposed rules for the 45Z Clean Fuel Production Credit. While the credit has been available since January 2025, producers and farmers have struggled to capitalize on it with only minimal guidance. The proposal responds to taxpayer comments on prior guidance and provides additional certainty for the industry as the formal rulemaking process moves forward.
The proposed rules provide taxpayers with safe harbors, clarify questions on qualified sales, tolling arrangements, and qualifying fuels used in non-transportation applications raised after the January 2025 guidance. The proposal makes no changes to prevailing wage rules in place since June 2024. The proposal includes changes to the 45Z Credit passed by Congress in July 2025, including limits on feedstock eligibility. Additional changes to carbon intensity scores – such as consideration of regenerative agriculture practices – await publication of a new version of the 45ZCF-GREET model.
Category: Policy
