New Guidance for 45Z Clean Fuel Production Credit from the U.S. Treasury and IRS

The U.S. Department of the Treasury (USDT) and the Internal Revenue Service (IRS) issued long-awaited guidance for the 45Z Clean Fuel Production Credit. The guidance is both a Notice of Intent to Propose Regulations (N-2025-10) and a Notice providing the annual emissions rate table (Notice 2025-11), detailing methods used to determine the lifecycle GHG emissions of fuel.

Some may be disappointed that this is merely a notice of forthcoming proposed regulations, (however, a draft of the proposed regulations is in the notice’s appendix) leaving the door open for the new administration to make changes or instruct that proposed regulations not be issued at all. This guidance provides clues as to what the current administration was considering. This also provides for a comment period.

On the question of who is eligible to claim the credit, it is intended that the producer is the eligible person, and that compressors and blenders of fuel are not producers.

On the question of what products are eligible for the credit, the guidance states that “the Treasury and the IRS intend to propose that 45Z-creditable transportation fuel must itself (or when blended into a fuel mixture) have either practical or commercial fitness for use as a fuel in a highway vehicle or aircraft.” Marine diesel, methanol and RNG, if produced in a manner that when compressed it could be used as transportation fuel, would be qualifying products.

In conjunction with the IRS guidance, the Department of Energy is expected to shortly release the 45ZCF-GREET model.

Stay tuned to Weaver for analysis of this guidance and new developments on the 45Z Clean Fuel Production Credit, and contact us with any questions about these credits or other related topics.

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