WASHINGTON, DC – Biofuel producers now have a new way to pursue the federal 45Z clean fuel tax credit even if their fuel is not already listed in the government’s standard emissions tables.
The Department of Energy created a process that allows producers to submit information about how their fuel is made, what feedstock they use and how much greenhouse gas is produced along the way.
DOE can then calculate an emissions value for that fuel. Producers may use that number when asking the Treasury Department for a provisional rate that could allow the fuel to qualify for the tax credit.
The change could help newer or less-common biofuels that were left out of the existing government tables. Those fuels previously faced more uncertainty about whether they could participate in the 45Z program.
The Internal Revenue Service will still determine whether a producer qualifies for the credit, but the new DOE process gives more fuel pathways a chance to be considered.
Farm-Level Takeaway: More biofuel pathways could qualify for 45Z, potentially supporting additional demand for crops and other agricultural feedstocks.