On Tuesday, February 3, the Treasury Department and Internal Revenue Service (IRS) released proposed regulations regarding the 45Z Clean Fuel Production Credit. The proposed rules, which will be officially published on Wednesday, February 4, provide guidance for determining clean fuel production credits, eligibility standards, emissions rates, certification procedures, and registration requirements.
Mitchel Hora, CEO and Founder of Continuum Ag, says the new document helps “clean up” and clarify existing rules.
“45Z has had input from the Inflation Reduction Act—the One Big Beautiful Bill—and multiple other rulemakings over the last three years. This document cleans up a lot of the definitions, a lot of those existing rules, and compiles it all into one big document that clarifies everything. That’s really the gist of this: it’s the full rule, integrating much of the work that has already been done and putting it all out there.
It also cleans up what biofuel producers can qualify, what constitutes a qualified sale, and outlines how biofuel producers have to apply, register, and participate. So there are a lot of details that are really important for the biofuel producers, the CPA firms, and the consultants.”
The Treasury and IRS will open a public comment period following publication, giving stakeholders an opportunity to weigh in before the rules are finalized.
