U.S. Treasury Urged to Issue Guidance on Clean Fuel Tax Credit

Green diesel and jet fuel stakeholders are urging U.S. Treasury Secretary to issue 45Z Clean Fuel Production Credit (CFPC) guidance as soon as possible. The stakeholders are concerned that the tax credit filing information will not be ready by January 1st when the biodiesel blender’s tax credit turns into a producer’s credit based on carbon intensity scores. Stakeholders are asking for the proposed rules and safe harbor guidance to be issued by September 1 and a final rulemaking by November 1. Ethanol, biodiesel, renewable diesel and sustainable aviation fuel (SAF) will all be eligible for the new production tax credit, however, depending on the outcome of the November elections, a GOP controlled Congress could reelevate much of the IRA’s tax credits.

Clean Fuels is also requesting the Treasury provide guidance clarifying that renewable heating fuels are a transportation fuel under the section 45Z credit. The statute defines “transportation fuel” as a fuel which is “suitable for use as a fuel in a highway vehicle or aircraft” (emphasis added). However, that does not mean it must exclusively be used as a fuel in a highway vehicle or aircraft to receive the credit.

“US biodiesel, renewable diesel, and sustainable aviation fuel producers are facing difficulties finalizing feedstock contracts, securing capital flows, and meeting project deadlines without knowing the value of the credit. The need for policy certainty is urgent,” the group told Yellen. The Stakeholders said guidance on 45Z needs to be issued well before the credit is set to take force on January 1, 2025.

CLICK HERE to view a copy of the letter