A proposed rule from the U.S. Treasury Department that would implement the 45Z Clean Fuel Production Tax Credit is getting the “thumbs up” from the Renewable Fuels Association, calling it a key step toward providing long-awaited clarity for ethanol and other biofuel producers.
“Today’s 45Z proposed rule is a step in the right direction toward providing the clarity and certainty that ethanol producers are seeking,” said RFA President and CEO Geoff Cooper. “We thank the Treasury Department and Trump administration for listening to the input provided by ethanol producers and other stakeholders. The proposal appears to resolve some of the previous confusion around what constitutes a ‘qualified sale,’ and begins to integrate the important improvements to 45Z that resulted from the One Big Beautiful Bill Act, such as the removal of indirect land use change emissions from the carbon intensity scoring framework.
“However, much work remains to be done and many questions still need to be answered. First and foremost, ethanol producers are anxiously awaiting a new, revised version of the 45ZCF-GREET model, which will help shed light and provide clearer direction on several critical issues. In addition, questions remain to be resolved around the quantification of emissions related to low-carbon feedstock production at the farm level, implementation of foreign feedstock prohibitions, and provisions related to the use of energy attribute credits,” added Cooper.
The 45Z credit, created under the Inflation Reduction Act, replaces earlier biofuel tax incentives and is designed to encourage domestic production of cleaner transportation fuels beginning in 2025. Industry groups have urged Treasury to clearly define eligibility, emissions modeling and reporting requirements.
RFA said the proposed regulation would help strengthen rural economies, support U.S. energy security and accelerate innovation across the renewable fuels sector as producers work to lower carbon intensity and expand clean fuel markets.
Sources: Renewable Fuels Association, NAFB News Service
