IRC §45Z Clean Fuel Production Credit Proposed Regulations
Proposed Regulations Released
On January 10, 2025, the IRS published draft text of the forthcoming Proposed Regulations for IRC § 45Z in the appendix of IRS Notice 2025-10. These proposed regulations detail the implementation of the Federal Clean Fuel Production Credit, including eligibility criteria and calculation methods.
The IRS also provided initial guidance on methods for determining emissions rates in IRS Notice 2025-11. The initial emissions rate table is in the appendix.
Any written comments should be provided by April 10, 2025. Comments may be submitted online at the Federal eRulemaking Portal at Regulations.gov.
About the Clean Fuel Production Credit
The IRC §45Z credit, established under the Inflation Reduction Act of 2022, incentivizes the production of clean transportation fuels to reduce greenhouse gas emissions.
To qualify for the credit, taxpayers must:
Produce transportation fuel at a qualified facility located in the United States.
Sell the fuel to an unrelated person in a qualifying manner.
Be registered as a producer of clean fuel under IRC §4101 at the time of production.
This credit applies to fuel produced after December 31, 2024, and sold by December 31, 2027.
