Clean Fuels Seeks Added Clarity in Final 45Z Clean Fuel Production Credit Rules

Testimony emphasizes need for up-to-date 45ZCF-GREET model and timely final rules

“We greatly appreciate the proposed regulations addressing qualified sales sold for use in a trade or business, transportation fuel and it being suitable for use, defining a qualified facility, as well as stating the allowance of the tolling relationship,” Kovarik stated during the testimony. “While the Proposed Regulations provide much-needed market certainty for biodiesel and renewable diesel producers, we are requesting additional clarity in some areas. Specifically, for instance, we are awaiting publication of the modified 45ZCF-GREET model. We would also appreciate additional guidance as to how to apply the credit to fuel produced prior to publication of the proposed rule and further clarity on the Prevailing Wage and Apprenticeship requirements as they relate directly to 45Z.”

Clean Fuels’ testimony specifically asked for additional clarity on:

• Renewable heating fuel as an example of a qualifying use of biodiesel or renewable diesel.
• The term “single production line” as it relates to qualified facilities defined to apply specifically to production of fuel and not processing of feedstocks in an integrated facility.
• Safe harbors and their application to fuel produced in 2025.
• The definition of “qualified facility” and “alteration or repair” under the Prevailing Wage and Apprenticeship rules to be consistent with other provisions in the tax code.

Clean Fuels also requested timely action on implementation, including:

• Updates to the 45ZCF-GREET model during the current tax year to include changes passed by Congress that became effective at the start of the year.
• Providing farmers maximum flexibility for on-farm practices and feedstocks in the FD-CIC module for 45ZCF-GREET.

Kovarik added, “Producers are grateful that Congress adopted beneficial changes to the 45Z credit last July through the One Big Beautiful Bill. Taxpayers now need certainty that those changes can be claimed throughout the year. That requires publication of an updated 45ZCF-GREET model by DOE. Increased certainty will help achieve Congress’ goals of producing more domestic energy and supporting farmers with domestic market opportunities.”