Today, the U.S. Treasury Department and Internal Revenue Service (IRS) released long overdue proposed regulations on how biofuel producers can claim the 45Z Clean Fuel Production Tax Credit, amended under the One, Big, Beautiful Bill. The proposed regulations provide guidance on the determination of clean fuel production credits, emissions rates, and certification and registration requirements. American Coalition for Ethanol (ACE) CEO Brian Jennings issued the following statement in response:
“We are grateful that Treasury’s proposed rule begins to provide ethanol producers and others more certainty and answers about how to claim the 45Z credit going forward, and we look forward to additional clarity on how ethanol producers can monetize low-carbon farming practices through the tax credit. Since ag-based feedstocks represent about half of ethanol’s carbon intensity, ethanol producers need to have the opportunity to monetize low-carbon feedstocks to fully unlock the value of 45Z.
“We urge Treasury to continue working closely with the U.S. Department of Agriculture and the Department of Energy to develop and finalize the tools necessary to achieve full monetization of farming practices, such as USDA’s Feedstock Carbon Intensity Calculator (FD-CIC) and DOE’s 45ZCF-GREET model. Last year, USDA asked ACE to help peer-review and beta-test the FD-CIC, and we submitted reams of data and feedback on the tool. We are encouraged Treasury expects the 45ZCF FD-CIC to undergo periodic updates, including incorporation of new data gathered from real-world activities such as the USDA Regional Conservation Partnership Program (RCPP) activity being led by ACE. This work is specifically designed to address the perceived need for more empirical data on the low-carbon benefits of farming practices to help improve the accuracy of modeling tools. We are hopeful the FD-CIC and 45ZCF-GREET model will reflect the feedback we provided and are finalized soon.”
ACE will testify at the May 28 hearing and provide written comments in response to these proposed regulations.