The biofuels industry is pressing the U.S. Treasury Department to finalize rules for the 45Z clean fuel production tax credit as producers face mounting uncertainty nearly halfway through the 2026 tax year.
During a three-day public hearing last week, ethanol groups and farm organizations delivered a unified message: Congress has acted, and Treasury must now establish workable regulations quickly. The credit's value hinges on carbon intensity scores calculated through the Department of Energy's GRET model — which producers still cannot access.
"We're nearly halfway through the 2026 tax year, and producers still don't have access to the model required for determining the emissions rate," said Geoff Cooper, president of the Renewable Fuels Association, noting that delays are creating "tremendous uncertainty and investment risk."
The credit holds significant implications for farmers. According to the American Coalition for Ethanol, farming practices represent roughly half of ethanol's carbon intensity score. AC chief consultant Jonathan Lehman urged Treasury to verify low-carbon farming practices using existing USDA infrastructure, including FSA, NRCS, and RMA data.
However, not all stakeholders support 45Z. Fuel retailer groups representing 90% of retail fuel sales called the credit "a giant step backward," arguing that only 20% of its value reaches blenders and consumers. They're pushing Congress to reinstate the biodiesel blender's tax credit instead.
The Treasury Department's final rule will need to balance these competing interests while providing clarity producers desperately need.
This synopsis was created with the use of AI.