Groups urge US treasury department to promptly complete guidance for 45Z clean-fuels production credit

Twenty-five trade associations representing producers, feedstock providers, blenders, consumers and retailers of low-carbon, renewable fuels sent a letter May 15 to Treasury Secretary Janet Yellen, urging the U.S. Department of the Treasury to finalize and publish guidance for the 45Z clean-fuels production credit as soon as possible.

The new credit, adopted in the 2022 Inflation Reduction Act, is designed to incentivize domestic production of low-carbon fuels on a technology-neutral basis.

The value of the credit is based on the lifecycle greenhouse-gas emission score of each fuel.

“With the 45Z credit set to take effect Jan. 1, 2025, our member companies and organizations may face significant headwinds and business risk if this guidance is not published promptly,” the groups write. “Any extended delays in publication of guidance for the 45Z credit may disrupt project timelines, impede capital flows, and threaten existing production and demand for low-carbon renewable fuels.”

Kurt Kovarik, vice president of federal affairs for Clean Fuels Alliance America, added, “U.S. biodiesel and renewable diesel producers are facing uncertainty [with] the transition from the biodiesel and renewable diesel blender credit to the producer credit. They are facing difficulties already as they try to negotiate feedstock and fuel-offtake contracts for next year. The need for policy certainty is urgent.”

Joining Clean Fuels in signing the letter are:

• Advanced Biofuels Business Council

• Airlines for America

• Alternative Fuels & Chemicals Coalition

• American Biogas Council

• American Short Line and Regional Railroads Association

• American Soybean Association

• Associated Equipment Distributors

• Association of American Railroads

• Association of Equipment Manufacturers

• Cargo Airline Association

• Coalition for Renewable Natural Gas

• General Aviation Manufacturers Association

• Growth Energy

• Methanol Institute

• National Air Transportation Association

• National Business Aviation Association

• National Corn Growers Association

• National Oilseed Processors Association

• North American Renderers Association

• Renewable Fuels Association

• SAF Coalition

• U.S. Canola Association

• Vertical Aviation International

• Waste Gas Capture Initiative

The full letter is available here.