News surrounding ‘45Z guidance’ broke on Friday, January 10, as the U.S. Department of the Treasury and the Internal Revenue Service (IRS) released much anticipated and long overdue guidance on the Clean Fuel Production Tax Credit (Section 45Z).
“While we were hoping for more, at least it’s starting to be addressed,” says Donna Funk, lead biofuels advisor for Pinion. “The announcement was largely a statement of the ‘intent to issue guidance’ at a later date – and unfortunately, that has left us with many unanswered questions.”
Below is a summary of new and/or confirmed information from the press release:
Summary of Key Takeaways
- There will be a separate 45Z GREET model for non-SAF (sustainable aviation fuel) transportation fuel. This model will allow for some producer specific inputs and some standard factors that cannot be modified.
- The 45Z GREET model is not available yet but is anticipated to be released imminently.
- Clarity on renewable natural gas and who in the production process could be eligible and who will not be eligible.
- No information was included on Climate Smart Agricultural (CSA) practices – but there is intent to issue subsequent guidance on the topic; the 40B SAF tax credit CSA practices were referred to as first-of-its-kind pilot.
- There is an open comment period until April 10, which signifies further delays in final guidance.
Pinion’s biofuels advisory team is continuing to closely review the guidance issued and will update you with insights, need-to-know items, and action steps.
- View the guidance from the U.S. Department of the Treasury and Internal Revenue Service: U.S. Department of the Treasury Releases Guidance on Clean Fuels Production Credit | U.S. Department of the Treasury
If you have any questions, please reach out to a Pinion advisor.
