New 45Z guidance moves farmers closer to biofuel premiums
Treasury’s 45Z proposal added a Form 637 gate and narrowed feedstocks to North America, while DOE’s June 12 GREET update sharpened the path to farm premiums.
The Treasury Department and IRS on Feb. 3 proposed 45Z rules that would run through Dec. 31, 2029 and require Form 637 registration before producers can claim the credit.
The proposal limited eligible feedstocks to crops and materials grown or produced in the United States, Mexico or Canada, removed indirect land-use change from emissions calculations and barred negative emissions rates except for fuels made from animal manure. It also set a public hearing for May 28, 2026.
The Department of Energy on June 12 updated the 45Z-CF GREET model with improved carbon-scoring data and changes that reflected Congress's 2025 revisions. Growers need field-level records, feedstock origin documentation and contracts with biofuel plants that can pass 45Z value back to the farm if the carbon-intensity score clears the right threshold.
American Farm Bureau Federation President Zippy Duvall called the proposal an important step and highlighted protection for domestic feedstocks, but USDA and DOE still had to finalize carbon-intensity resources before farmers could fully benefit. The Iowa Soybean Association backed the guidance for biodiesel made from U.S. soybeans and pointed to Environmental Protection Agency proposals for 5.61 billion gallons of biomass-based diesel in 2026 and 5.86 billion gallons in 2027.
The Iowa Soybean Association put the state's 2025 biodiesel figures at 1.68 billion pounds of soybean oil used to produce 224.5 million gallons of biodiesel, and a 2024 study cited by the association put biodiesel's impact at $123 million in labor income, $520 million in value added and $2.2 billion in total output. American Carbon Alliance tied the updated guidance to private capital and new markets, while the Renewable Fuels Association flagged unresolved issues around the revised GREET model, farm-level low-carbon feedstock production, foreign feedstock prohibitions and energy attribute credits.
Clean Fuels Alliance America tied the need for certainty to One Big Beautiful Bill Act changes that can now be claimed for current tax years, some ending as early as summer 2026.
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