Clean Fuels Reacts to §45Z Guidance

WASHINGTON, DC – Clean Fuels Alliance America thanks U.S. Treasury and USDA officials for releasing long-awaited guidance describing the intended rules for the §45Z Clean Fuel Production Credit and giving stakeholders an opportunity to evaluate its workability. The new credit became available to U.S. biodiesel, renewable diesel, SAF and other domestic biofuel producers on January 1, 2025. Many domestic producers have been stymied over the past year in negotiating feedstock and fuel offtake contracts for 2025 while waiting for guidance on the new tax credit.

The guidance released on Jan. 10 begins to clarify important questions on how to calculate the credit and what fuels, feedstocks and producers are eligible. Additional information is still needed, though, to enable producers to calculate credit values.

Kurt Kovarik, Clean Fuels Vice President of Federal Affairs, stated, “We look forward to working with our members to evaluate the overdue guidance and forthcoming GREET model. We appreciate USDA, Treasury and the Department of Energy for issuing guidance. We’re hopeful that today’s notice provides the necessary certainty that producers can rely on ahead of the final rules. Clean fuel producers still need the carbon intensity scores from the GREET model to calculate their credit values; this missing information is key to enabling them to negotiate feedstock and fuel offtake agreements for the year and get back to business.”

Kovarik added, “Domestic production of biomass-based diesel has doubled since 2020, benefitting from multiyear certainty in federal tax policy. Biodiesel and renewable diesel combined now meet 9% of U.S. demand for distillate fuel for heavy-duty transportation needs. Clean Fuels and its member companies will carefully evaluate the guidance to ensure it provides needed certainty for all stakeholders and supports the industry’s continued growth.”

Contact: Paul Winters, 202-737-8803, pwinters@cleanfuels.org.

ABOUT CLEAN FUELS ALLIANCE AMERICA

Made from an increasingly diverse mix of resources such as recycled cooking oil, soybean oil, and animal fats, the clean fuels industry is a proven, integral part of America’s clean energy future. Clean Fuels Alliance America is the U.S. trade association representing the entire biodiesel, renewable diesel and sustainable aviation fuel supply chain, including producers, feedstock suppliers and fuel distributors. Clean Fuels receives funding from a broad mix of private companies and associations, including the United Soybean Board and state checkoff organizations.