Clean Fuels urges Treasury to finalize 45Z rules and update model quickly

Clean Fuels Alliance America on May 28 told Treasury that the Section 45Z Clean Fuel Production Credit will only work if final rules are clear enough for biodiesel and renewable diesel producers to model immediately, contract against and finance around. Kurt Kovarik, the group’s vice president of federal affairs, welcomed Treasury’s proposed framework but said producers still need more certainty before they can fully plan around the credit.

The hearing came after Treasury and the IRS published proposed 45Z regulations on Feb. 4, with comments due April 6, and after the public hearing window, originally set for May 27-29, was converted to a telephonic-only format. The Federal Register said 863 comments had been received on the proposal, underscoring how closely fuel makers, farm groups and other stakeholders are tracking the final shape of the rule. The proposal would cover credit eligibility, emissions rates, certification and registration requirements, while also revising elective payment, credit transfer and excise tax registration rules so they better align with 45Z.

For Clean Fuels, the most important unresolved issue is the 45ZCF-GREET model that Treasury and the Department of Energy use to determine carbon-intensity values. The group asked Treasury to publish an updated model promptly and to reflect congressional changes in the current tax year, arguing that producers cannot lock in feedstock premiums, project finance or plant upgrades without knowing how the carbon score will be calculated. Clean Fuels also pressed Treasury to clarify how 45Z applies to renewable heating fuel, how to interpret single production line, how safe harbors should work for fuel produced in 2025, and how prevailing wage and apprenticeship rules interact with eligibility.

The association also called for a cleaner explanation of qualified facilities, tolling relationships and whether fuel sold for use in a business or transportation context qualifies. It said farmers should have maximum flexibility in on-farm practices and feedstocks so low-carbon grain can be properly recognized under the credit.

The broader industry is pressing the same point. The Renewable Fuels Association also urged Treasury at its May 2026 hearing to finalize the rule quickly and release an updated 45ZCF-GREET model reflecting changes required by last year’s One Big Beautiful Bill Act. DOE released the model on Jan. 15, 2025, after Treasury and IRS issued initial 45Z guidance on Jan. 10, 2025, with DOE saying the credit applies to eligible domestic transportation fuel produced after Dec. 31, 2024 and sold by Dec. 31, 2027. Treasury said at the time the credit was meant to lower transportation costs, support U.S. competitiveness and reflect stakeholder input.