By Jamie Martin
The ethanol industry has reacted positively to the U.S. Treasury Department’s proposed regulations for the Section 45Z Clean Fuel Production Tax Credit. The credit was created to support cleaner transportation fuels and was strengthened through recent legislative updates.
“Today’s 45Z proposed rule is a step in the right direction toward providing the clarity and certainty that ethanol producers are seeking. We thank the Treasury Department and Trump administration for listening to the input provided by ethanol producers and other stakeholders," said RFA President and CEO Geoff Cooper.
"The proposal appears to resolve some of the previous confusion around what constitutes a ‘qualified sale,’ and begins to integrate the important improvements to 45Z that resulted from the One Big Beautiful Bill Act, such as the removal of indirect land use change emissions from the carbon intensity scoring framework," said Cooper.
Another important update is the inclusion of feedstocks grown in Canada and Mexico, which expands sourcing options while supporting North American agricultural trade. These changes are viewed as important improvements that better align the tax credit with current farming and biofuel production practices.
However, ethanol producers stress that key uncertainties remain. A revised version of the 45ZCF-GREET model has not yet been released, leaving questions about how emissions will be calculated. Producers are also seeking clarity on how low-carbon farming practices will be measured at the farm level and how rules related to foreign feedstocks will be enforced.
Concerns also remain around the treatment of energy attribute credits and how these credits may affect compliance and eligibility under the program. Industry groups say these details will be critical in determining whether the tax credit delivers meaningful and predictable value.
The Renewable Fuels Association plans to submit comments on the proposal and participate in an upcoming Treasury hearing. The group has consistently emphasized that final rules should reflect real-world agricultural and biorefining conditions while keeping registration, reporting, and recordkeeping simple.
Ethanol producers believe that clear and practical final regulations will help encourage long-term investment, support rural economies, and advance cleaner fuel goals.
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Categories: National