TL/DR –
Notice 2026-53 provides guidance on the Section 45Z clean fuel production credit, specifically emissions rates for animal manure-derived fuel, the inclusion of regenerative agricultural feedstock practices, and an emissions rate table for 2026. The available credit depends on the lifecycle greenhouse gas emissions rate of the produced fuel, and the regulations offer guidance on how these rates should be calculated. A safe harbor has been introduced for those with clean fuel production in 2025 using the 45ZCF-GREET model, and transition rules have been provided for feedstocks where the allowed methodology has not been updated.
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Key Guidelines on Section 45Z Clean Fuel Production Credit Clarified in Notice 2026-53
Important guidelines on the Section 45Z clean fuel production credit have been outlined in Notice 2026-53, which sheds light on three major aspects:
- Establishment of emissions rates for transportation fuel that is derived from animal manure
- Consideration of specific regenerative agricultural feedstock practices
- The emissions rate table for 2026 for the application of §45Z
Typically, the credit that can be availed is based on the life cycle greenhouse gas emission rate of the fuel produced. The Proposed Regulations for §45Z have outlined the significance of the annual emissions rate tables and the method of their application by taxpayers claiming the credit. The Notice expands on these proposed regulations by providing guidance on fuel pathways derived from manure and by addressing various technical updates to the modeling under §45Z. The IRS states, “today’s notice provides the 2026 emissions rate table used to calculate the credit and allows certain regenerative agricultural practices and farm-specific manure management practices to be reflected in emissions calculations, helping agricultural producers participate in the growing domestic biofuels market.”
The 2026 emissions rate at present includes dairy and swine manure. However, it is likely that poultry and beef manure feedstocks will be added to the 45ZCF-GREET model in subsequent guidance. In addition, certain “farm-specific prior manure management practices” might be taken into account.
The Notice has introduced a safe harbor for those involved in clean fuel production in 2025 using the 45ZCF-GREET model under particular circumstances. Transition rules have also been provided for those feedstocks for which an updated methodology is not yet available.
Guidance and Support
The Forvis Mazars Inflation Reduction Act Consulting team is ready to discuss these changes and their potential impact. Whether you are producing clean fuel in 2025 and making use of the new safe harbor, or producing in 2026, our team can guide you through the process.
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