US Treasury Targets November for Release of Final 45Z Rule
The U.S. Department of the Treasury intends to issue final 45Z Clean Fuel Production tax credit rules in November, according to the Trump administration’s latest regulatory agenda released by the White House Office of Management and Budget (OMB) on July 3.
The anticipated timeline appears in the administration’s 2026 Regulatory Plan and Unified Agenda of Federal Regulatory and Deregulatory Actions, which provides a government-wide snapshot of intended regulatory and deregulatory actions that cover more than 60 departments, agencies, and commissions.
The latest edition of the agenda is the first published by the current administration since September 2025.
The Treasury Department and the Internal Revenue Service (IRS) issued proposed regulations for the 45Z credit in February, followed by a public comment period that closed April 6.
The agencies subsequently held a three-day public hearing in late May, where biofuel producers, trade associations and other stakeholders urged the Treasury Department to finalize the rule as quickly as possible while ensuring it reflects changes Congress made to the program under last summer’s One Big Beautiful Bill (OBBB) Act.
Industry participants warned that the delay in issuing final guidance created uncertainty for producers awaiting definitive carbon intensity (CI) calculations and eligibility requirements.
Additional pieces of the program have since fallen into place. In June, the U.S. Department of Energy (DOE) released an updated version of its 45Z-specific Greenhouse Gases, Regulated Emissions and Energy Use in Transportation
(45ZCF-GREET) model to incorporate changes enacted under the OBBB, including eliminating indirect land use change (ILUC) emissions, restricting eligible feedstocks to those sourced from the U.S., Canada and Mexico, and preventing fuels from receiving negative CI scores.
Later that month, the U.S. Department of Agriculture (USDA) issued technical guidelines for measuring the CI of key biofuel feedstocks and released its updated Feedstock Carbon Intensity Calculator (USDA FD-CIC) covering domestic corn, soybeans, sorghum and spring canola.
The guidance was viewed by market participants as removing another major hurdle to implementing the credit by providing a methodology for calculating feedstock CI values used under the program.
The remaining step is for the Treasury Department and the IRS to finalize regulations that incorporate the updated technical guidance into the 45Z framework, allowing producers to calculate and claim credits using the completed methodology.
Originally enacted under the Inflation Reduction Act, the 45Z tax creditprovides a technology-neutral production incentive for transportation fuels based on lifecycle greenhouse gas emissions.
Congress later extended the program through 2029 and revised several provisions under the OBBB, making the credit a central policy mechanism for producers of renewable diesel, sustainable aviation fuel (SAF), ethanol, renewable natural gas and other low-carbon fuels.