IRS Releases Clean Fuel Credit Guidance
The IRS has released regulatory guidance on the Clean Fuel Production Tax Credit (45Z), offering clarity for biogas producers and affirming key provisions they had hoped to see. The guidance outlines specific credit pathways for fuels derived from organic materials like dairy manure, swine waste, and food scraps. It also confirms that clean fuels produced in 2025 will be covered under the tax credit framework. The announcement provides much-needed certainty after years of regulatory delays, with many biogas producers holding off on claiming credits until this guidance was issued. The American Biogas Council praised the IRS for incorporating industry priorities and noted that billions in investment have been waiting to move forward due to uncertainty around eligibility criteria. With final language now clearer, developers can begin integrating 45Z into future project planning. IRS CEO Frank Bisignano stated the guidance is expected to unlock new investments while supporting domestic biofuel production and reducing fuel costs. The credit’s value depends on a fuel's carbon intensity as calculated by USDA models, with recent updates allowing for differentiated calculations based on manure types.
Topics: biogas carbon_accounting clean_energy IRS