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Long awaited 45Z tax credit guidelines not very helpful

The biofuels industry is disappointed with the long-awaited guidelines for clean fuels tax credits.

U.S. Treasury officials released tax guidance for the 45Z credits Friday, saying this provides clarity on issues including which entities and fuels are eligible for the credit, and how lifecycle emissions are determined, but Geoff Cooper with the Renewable Fuels Association says it falls short of expectation. “They can take the guidance today and use it, and claim the tax credit. That sounds nice in principal and in concept but the details surrounding how to do that are still missing.”

Cooper says without specific information about the new GREET Model and emissions rate information, producers are left in limbo.

John Fuher with Growth Energy agrees. “We need to know what type of incentive levels might be available to us under this tax credit and based on what we’ve seen so far today, that has not been released and it sounds like we won’t hear that until early next week.”

The Treasury Department’s guidelines say the forthcoming rules would allow the producer of the eligible clean fuel to claim the 45Z credit, but compressors and blenders of fuel would not be eligible.  Both Cooper and Fuher say the Treasury Department also didn’t fully consider the USDA’s Climate Smart Agriculture recommendations that would have allowed farmers to benefit from the program.