US finalizes 45Z framework for low-carbon crop biofuel feedstocks

On June 25, USDA finalized a 45Z feedstock framework that lets U.S. crops such as corn, soybeans and sorghum carry carbon-intensity scores. The rule sets technical guidelines for quantifying, reporting and verifying the carbon intensity tied to regenerative biofuel feedstock crops, and USDA’s final Feedstock Carbon Intensity Calculator was released in June 2026.

The final rule builds on USDA’s interim version from January 15, 2025, which was posted for public inspection the next day. The beta calculator covered field corn, soybeans and sorghum, and let producers test practices including no-till, reduced till, cover crops, nitrification inhibitors, split in-season fertilizer application and spring-only fertilizer application. The final rule will be posted for public inspection on June 26 and published on June 29.

The framework lands alongside Treasury and IRS guidance issued on January 10, 2025 under Section 45Z, the Clean Fuel Production Credit, which applies to 2025 production of transportation fuels, including sustainable aviation fuel and non-SAF fuels. The credit is technology-neutral, pays support on a per-gallon or gallon-equivalent basis, and uses annual emissions-rate tables and a Department of Energy model. Under the framework, the maximum credit reaches up to $1 per gallon for non-aviation fuel and $1.75 per gallon for SAF, with an additional 2 cents per point for carbon-intensity reductions beyond the 50% threshold.

Brian Jennings, chief executive of the American Coalition for Ethanol, said the USDA rule represented meaningful progress toward letting farmers who already use low-carbon practices monetize them through 45Z, and said Treasury incorporation of the USDA rule and the calculator into a final 45Z rule would provide certainty for farmers and biofuel producers. American Soybean Association president Scott Metzger said the rule could “unlock a new premium soybean market,” while Renewable Fuels Association president and chief executive Geoff Cooper said U.S. farmers deserve to profit from practices they are already doing and that USDA’s rule begins to quantify and recognize those environmental benefits.

On July 24, 2024, Sen. Joni Ernst and 51 other lawmakers urged Treasury to publish proposed 45Z guidance by Sept. 1 and finish final rulemaking by Nov. 1. Treasury issued proposed regulations on February 3, 2026 covering eligibility, emissions rates and certification and registration requirements, and biofuel and commodity groups pressed again at a public hearing on May 28 for final rules before planting and harvest decisions harden for the 2026 crop year.