Instructions for Form 7218

Instructions for Form 7218

(Rev. December 2025)

Use with the December 2024 revision of Form 7218

Clean Fuel Production Credit

Section references are to the Internal Revenue Code

unless otherwise noted.

December 31, 2025. See Emissions Factor, later, for more

information.

General Instructions

Coordination with other credits. Public Law 119-21

changed how the section 45Z credit coordinates with the

sections 6426(k) and 40A credits. See Coordination with

other credits, later, for more information.

Future Developments

For the latest information about developments related to

Form 7218 and its instructions, such as legislation

enacted after they were published, go to IRS.gov/

Form7218.

What’s New

Form 7220, Prevailing Wage and Apprenticeship

(PWA) Verification and Corrections. For each qualified

facility where you produced clean fuel and are claiming

the increased credit amount for meeting the prevailing

wage and apprenticeship requirements, you must file a

separate Form 7220.

Notice 2025-10. This notice announces forthcoming

proposed regulations and provides guidance on the

determination of the clean fuel production credit, including

credit eligibility, calculation, claim filing, registration, and

certification.

Notice 2025-11. This notice provides initial guidance on

how to determine emissions rates and includes the first

emissions rate table for fuel produced after December 31,

2024.

Notice 2025–37. This notice publishes the inflation

adjustment factor and applicable amounts for calendar

year 2025 for the clean fuel production credit.

Termination date. Public Law 119-21, commonly known

as the One Big Beautiful Bill Act, changed the termination

date for the section 45Z clean fuel production credit from

December 31, 2027 to December 31, 2029.

Specified foreign and foreign-influenced entity.

Public Law 119-21 disallows specified foreign and

foreign-influenced entities from claiming the 45Z credit.

See How To Claim the Credit, later, for more information.

Prohibition on foreign feedstocks. Public Law 119-21

prohibits certain foreign feedstocks for fuel produced after

December 31, 2025. See Column (b), later, for more

information.

Sustainable Aviation Fuel (SAF). Public Law 119-21

removed the special rate for SAF produced after

December 31, 2025. See Applicable Amount, later, for

more information.

Emissions rate. Public Law 119-21 changed how certain

emissions rates are determined for fuel produced after

Dec 29, 2025

Safe harbor for substantiation of emissions rate for

non-SAF production. Producers of non-SAF

transportation fuel may substantiate the emissions rate for

a non-SAF transportation fuel by obtaining certification for

that fuel in substantially the same form and manner for

certifying a SAF transportation fuel emissions rate as

described in the appendix of Notice 2025-10.

Reminders

Tax-exempt and governmental entities. Applicable

entities (such as certain tax-exempt and governmental

entities) can elect to treat the clean fuel production credit

as a payment of income tax. See Applicable entities, later.

Credit transfers. Eligible taxpayers, partnerships, and S

corporations can elect to transfer all or part of the credit

amount otherwise allowed as a general business credit to

an unrelated third-party in exchange for cash. Eligible

taxpayers don’t include applicable entities and electing

taxpayers. See Credit transfers, later.

Pre-filing registration. The IRS has established a

pre-filing registration that must be completed prior to

electing payment or transfer of the clean fuel production

credit. See Pre-filing registration requirement for payments

or transfers, later.

Purpose of Form

Use Form 7218 to claim the section 45Z credit for the

production of qualified clean fuel produced and sold after

2024.

How To Claim the Credit

To qualify for the credit, the clean fuel must be

transportation fuel produced in the United States

(including U.S. territories) by the taxpayer at a qualified

facility after 2024, and sold by the taxpayer to an unrelated

person for a use described in section 45Z(a)(4) during the

tax year. The taxpayer must be registered as a producer of

clean fuel under section 4101 at the time of production to

claim the credit. For more information about section 45Z(f)

registration requirements, see Notice 2024-49, available

at IRS.gov/irb/2024-26_IRB#NOT-2024-49.

Caution: Taxpayers who are specified foreign entities (as

defined in section 7701(a)(51)(B)) can't claim this credit

for tax years beginning after July 4, 2025.

Foreign-influenced entities (as defined in section 7701(a)

Instructions for Form 7218 (Rev. 12-2025) Catalog Number 94870K

Department of the Treasury Internal Revenue Service www.irs.gov

(51)(D)) can't claim this credit for tax years beginning after

July 4, 2027.

File a separate Form 7218 for each qualified facility for

which you claim the section 45Z credit. Complete Part I to

report facility information and the appropriate lines of Parts

II and III, as needed, to calculate your clean fuel

production credit for such facility.

Amount of Credit

The clean fuel production credit for any tax year is

adjusted annually for inflation. The credit is calculated by

multiplying the applicable amount by each gallon (or

gallon equivalent) of fuel produced and sold by the

emissions factor of the fuel.

If the fuel was produced and sold during calendar year

2025 the applicable amount before adjusting for inflation

ranges from $0.20 to $1.75 per gallon depending on

whether the fuel is sustainable aviation fuel (SAF) or

non-SAF, and if prevailing wage and apprenticeship

(PWA) requirements are met.

Applicable Amount

Base Amount Table for Fuel Produced and Sold

During Calendar Year 2025 (Without Inflation

Adjustment)

Type of fuel

Base amount

Non-SAF and PWA requirements are not met

$0.20

Non-SAF and PWA requirements are met

$1.00

SAF and PWA requirements are not met

$0.35

SAF and PWA requirements are met

$1.75

For all fuel produced after 2025 the applicable amount

before adjusting for inflation is either $0.20 (if PWA

requirements are not met) or $1.00 (if PWA requirements

are met) per gallon (or gallon equivalent).

The applicable amount is adjusted by multiplying the

base amount by the inflation adjustment factor for the

calendar year in which the sale of the transportation fuel

occurs. If an inflation adjusted applicable amount isn’t a

multiple of 1 cent, the amount must be rounded to the

nearest multiple of 1 cent.

For more information about the 2025 inflation

adjustment factor and applicable amounts, see Notice

2025-37, available at IRS.gov/irb/

2025-30_IRB#NOT-2025-37. The inflation adjusted

applicable amounts for 2025 range from $0.21 to $1.86

per gallon (or gallon equivalent).

Example. In 2025 the inflation adjustment factor is

1.0611. For non-SAF transportation fuel sold in 2025, the

base amount when PWA requirements aren't met is 21

cents (20 cents × 1.0611, then rounded to the nearest

cent). The alternative amount when PWA requirements

are met is $1.06 ($1.00 × 1.0611, then rounded to the

nearest cent). For SAF transportation fuel sold in 2025,

the base amount when PWA requirements aren't met is 37

cents (35 cents × 1.0611, then rounded to the nearest

cent). The alternative amount when PWA requirements

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are met is $1.86 ($1.75 × 1.0611, then rounded to the

nearest cent).

Emissions Factor

The emissions factor is calculated by subtracting the

emissions rate or provisional emissions rate (PER) (in

kilograms of CO2e per mmBTU) of the fuel from 50

kilograms of CO2e per mmBTU and dividing the result by

50 kilograms of CO2e per mmBTU.

The Treasury Department and the IRS will annually

publish a table that sets forth the emissions rate for similar

types and categories of transportation fuels based on the

amount of lifecycle greenhouse gas emissions as

described in section 211(o)(1)(H) of the Clean Air Act

(CAA) (42 U.S.C. 7545(o)(1)(H)), as in effect on August

16, 2022 (emissions rate table).

See Notice 2025-11 for initial guidance on how to

determine emissions rates and for the emissions rate

table for fuel produced after December 31, 2024, available

at IRS.gov/irb/2025-06_IRB#NOT-2025-11.

The following are applicable to fuel produced after

December 31, 2025:

• The emissions rate can't be less than zero.

• The emissions rate must be adjusted to exclude any

emissions attributed to indirect land use change. See

section 45Z(b)(1)(B)(iv), for more information.

• The Treasury Department and the IRS will provide

feedstock specific emissions rates for fuel derived from

animal manure. These emissions rates may be less than

zero. See section 45Z(b)(1)(B)(v), for more information.

PER value. In the case of any transportation fuel for

which an emissions rate has not been determined, a

taxpayer producing such fuel may request an emissions

value from the Department of Energy and use that

emissions value to file a petition with the Secretary of the

Treasury to determine the emissions rate with respect to

such fuel known as a provisional emissions rate (PER).

Applicable entities. Applicable entities (as defined

under section 6417(d)(1)(A)) that generally don’t benefit

from income tax credits may elect to treat the clean fuel

production credit as a payment of income tax. Resulting

overpayments may result in refunds.

Applicable entities making the elective payment

election for the clean fuel production credit must file the

following.

• Form 7218.

• Form 3800, General Business Credit.

• Form 990-T, Exempt Organization Business Income Tax

Return, or other applicable income tax return.

For a discussion of what is considered an applicable

entity, see Applicable entity making an EPE on IRA 2022

credits in the Instructions for Form 3800. For more

information on elective payment elections under section

6417, see Elective Payment of Certain Business Credits

Under Section 6417 or Section 48D in the Instructions for

Form 3800.

Credit transfers. Under section 6418, eligible taxpayers

can elect to transfer all or part of the clean fuel production

credit amount otherwise allowed as a general business

credit to an unrelated third-party in exchange for cash.

Instructions for Form 7218 (December 2025)

Eligible taxpayers don’t include applicable entities. For

more information on credit transfers, see Transfer of

Eligible Credits Under Section 6418 in the Instructions for

Form 3800.

Pre-filing registration requirement for payments or

transfers. Before you file your tax return, if you intend to

make an elective payment election or transfer election on

Form 3800 for the clean fuel production credit, you must

complete a pre-filing registration for each qualified facility.

To register, go to IRS.gov/credits-deductions/register-forelective-payment-or-transfer-of-credits. See Pub. 5884,

Inflation Reduction Act (IRA) and CHIPS Act of 2022

(CHIPS) Pre-Filing Registration Tool, for more information.

Also see Registering for and Making EPEs and Transfer

Elections in the Instructions for Form 3800.

Coordination with other credits. The section 6426(k)

credit is not allowed for any SAF in a qualified mixture sold

or used on or after July 4, 2025, (or before July 4, 2025, to

the extent that claims under section 6426(k) have not

been paid or allowed as of such date) if a section 45Z

credit is allowable. See section 6426(k)(4) for more

information.

For fuel sold or used after June 30, 2025, the section

40A credit is determined in addition to any credit

determined under section 45Z. See the instructions for

Form 8864 for more information.

Prevailing Wage Requirements

To meet the prevailing wage requirements with respect to

any qualified facility, a taxpayer must ensure that any

laborers and mechanics employed by the taxpayer or any

contractor or subcontractor in:

• The construction of such facility, and

• The alteration or repair of such facility are paid wages at

rates not less than the prevailing rates.

For qualified facilities placed in service before 2025, the

taxpayer isn’t subject to the prevailing wage requirements

with respect to the construction of the facility but is subject

to the prevailing wage requirements for the alteration or

repair of the facility with respect to any tax year beginning

after 2024, for which the section 45Z credit is allowed.

Correction and penalty mechanisms for a taxpayer's

failure to satisfy the prevailing wage requirements are set

forth under section 45(b)(7)(B).

Apprenticeship Requirements

The apprenticeship requirements apply only to the

construction of a qualified facility and include three

components: a labor hours requirement, a ratio

requirement, and a participation requirement.

• Under the labor hours requirement, the taxpayer must

ensure that, depending on when construction began, 10%

to 15% of the total labor hours performed in the

construction, alteration, or repair of the qualified facility

are performed by qualified apprentices from a registered

apprenticeship program.

• Under the ratio requirement, the taxpayer must ensure

that the applicable ratio of apprentices to journey-workers

established by the registered apprenticeship program is

met for apprentices working on the qualified facility each

day.

Instructions for Form 7218 (December 2025)

• Under the participation requirement, any taxpayer (or

contractor or subcontractor) that employs four or more

individuals in the construction, alteration, or repair of the

qualified facility must also hire at least one qualified

apprentice.

Certain transition rules may be applicable for qualified facilities placed in service before 2025. The

taxpayer isn’t subject to the apprenticeship requirements

with respect to construction of a facility that occurs on or

before 90 days after June 25, 2024.

For further information on the PWA requirements, go to

IRS.gov/PWAFAQS.

Definitions

Applicable Material

The term “applicable material” means:

• Monoglycerides, diglycerides, and triglycerides;

• Free fatty acids; and

• Fatty acid esters.

Biomass

The term “biomass” means any organic material other

than oil, natural gas, and coal (including lignite), or any

product thereof.

CO2e

The term “CO2e” with respect to any greenhouse gas

means the equivalent carbon dioxide (as determined

based on relative global warming potential).

Greenhouse Gas

The term “greenhouse gas” has the same meaning given

to such term under section 211(o)(1)(G) of the CAA.

mmBTU

The term “mmBTU” means 1,000,000 British thermal

units.

Qualified Facility

The term “qualified facility” means a facility used for the

production of transportation fuels, and does not include

any facility for which one of the following credits is allowed

under section 38 for the tax year.

• The credit for production of clean hydrogen under

section 45V.

• The credit determined under section 46 to the extent

that such credit is attributable to the energy credit

determined under section 48 with respect to any specified

clean hydrogen production facility for which an election is

made under section 48(a)(15). An election made under

section 48(a)(15) is an irrevocable election.

• The credit for carbon oxide sequestration under section

45Q.

Sale

A sale for purposes of the section 45Z credit occurs when

the transportation fuel is sold by the taxpayer to an

unrelated person:

• For use by such person in the production of a fuel

mixture,

• For use by such person in a trade or business, or

3

• Who sells such fuel at retail to another person and

places such fuel in the fuel tank of such other person.

Sustainable Aviation Fuel (SAF)

The term “sustainable aviation fuel (SAF)” means the

portion of liquid fuel that isn’t kerosene that is sold for use

in an aircraft and:

• Meets the requirements of either ASTM International

D7566, or the Fischer-Tropsch provisions of ASTM

International D1655 Annex A1; and

• Isn’t derived from palm fatty acid distillates or

petroleum.

SAF must also meet the transportation fuel

requirements of section 45Z(d)(5)(A). For more

information on the SAF requirements, see the appendix in

Notice 2025-10, available at IRS.gov/irb/

2025-06_IRB#NOT-2025-10.

To claim the clean fuel production credit for the

production and sale of SAF, unrelated party certification is

required under section 45Z(f)(1)(A)(i)(II)(aa).

Transportation Fuel

The term “transportation fuel” means fuel which:

• Is suitable for use in a highway vehicle or aircraft,

• Has an emissions rate which isn’t greater than 50

kilograms of CO2e per mmBTU,

• Isn’t derived from co-processing an applicable material

(or materials derived from an applicable material) with a

feedstock which isn’t biomass, and

• Isn't produced from a fuel for which a credit under

section 45Z is allowable.

The term “transportation fuel” includes non-SAF and

SAF transportation fuel.

Specific Instructions

Part I—Facility and Other Information

Line 1

If applicable, enter the IRS-issued registration number for

the facility. See Pre-filing registration requirement for

payments or transfers, earlier.

Line 2a

Enter a description of the qualified facility where the

transportation fuel was produced.

Line 2b

If different from filer, enter owner’s name and taxpayer

identification number (TIN).

Lines 2c and 2d

Enter the address of the facility and the coordinates of the

facility.

Line 4

Enter the date the qualified facility was originally placed in

service. This information is needed to determine the credit

amount based on PWA requirements.

Line 5a

Enter the producer registration number issued by the IRS.

See Notice 2024-49, section 4, available at IRS.gov/irb/

2024-26_IRB#NOT-2024-49, and the appendix in Notice

2025-10, available at IRS.gov/irb/

2025-06_IRB#NOT-2025-10, for the procedures to

register as a producer of clean fuel. Frequently asked

questions about applying for registration are available at

IRS.gov/newsroom/frequently-asked-questions-aboutapplying-for-registration-for-the-clean-fuel-productioncredit-under-ss-45z.

If the registration number does not fit on this line or you

have more than one registration number, please attach a

document with this information to your Form 7218.

Line 5b

Enter the date of your registration letter providing approval

for producers of transportation fuel with activity letter CN

(non-SAF) or CA (SAF). No clean fuel production credit

can be claimed for any transportation fuel unless the

taxpayer is registered as a producer of clean fuel under

section 4101 at the time of production. For example, if a

taxpayer receives a letter of registration dated June 30,

2025, the taxpayer cannot claim the section 45Z credit for

any transportation fuel produced and sold by the taxpayer

before June 30, 2025, even if all other section 45Z

requirements are met prior to that date. That taxpayer can

only claim the section 45Z credit for transportation fuel

produced and sold on or after June 30, 2025.

Line 6

Check the box if you are using a PER to calculate the

clean fuel production credit. A taxpayer may file a petition

with the Secretary for determination of the emissions rate

for any transportation fuel for which an emissions rate has

not already been established. See Emissions Factor

earlier, for more information.

Line 7

Check “Yes” if you satisfy the section 45Z(f)(6) and section

45Z(f)(7) PWA requirements. See Prevailing Wage

Requirements and Apprenticeship Requirements, earlier.

Additional information for increased credit amount. If

you checked “Yes” on line 7 and are using an increased

applicable amount on Part III, column (g), you must also

file Form 7220, Prevailing Wage and Apprenticeship

(PWA) Verification and Corrections, to establish

compliance with the PWA requirements. File a separate

Form 7220 for each qualified facility for which you are

claiming increased credit amounts.

Line 3

Enter the date construction began.

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Instructions for Form 7218 (December 2025)

Part II—Clean Aviation and

Non-Aviation Transportation Fuel

Production Credit

Line 2

On a separate Form 7218 enter "Credits from

Pass-Through Entities" on line 2a of Part I and report your

total distributive share from:

• Schedule K-1 (Form 1065), Partner’s Share of Income,

Deductions, Credits, etc., box 15 (code X);

• Schedule K-1 (Form 1120-S), Shareholder’s Share of

Income, Deductions, Credits, etc., box 13 (code X);

• Schedule K-1 (Form 1041), Beneficiary’s Share of

Income, Deductions, Credits, etc., box 13 (code L); and

• Form 1099-PATR, Taxable Distributions Received From

Cooperatives, box 12.

Partnerships and S corporations must enter the

passed-through credits on line 2. Also, estates and trusts

that can allocate the source credit to beneficiaries, and

cooperatives that can allocate the credit to patrons, must

enter the passed-through credits on line 2.

If you are not a filer described above, and your only

clean fuel production credit is a credit(s) passed through

to you, you can report the credit(s) directly on Form 3800,

Part III, line 1q. See Caution next.

Caution: If you receive a Schedule K-1 (Form 1065),

box 15, code BC; or a Schedule K-1 (Form 1120-S),

box 13, code BC, see Transferees of Eligible Credits

Under Section 6418 in the Instructions for Form 3800.

Line 3

Partnerships and S corporations. If you are a

partnership or S corporation electing to transfer the clean

fuel production credit with respect to a qualified facility (or

portion thereof) under section 6418(c), you must report

the total credit amount with respect to your facility on Form

3800, Part III, line 1q, and not on Schedule K.

Line 4

Cooperative election to allocate credit to patrons. A

cooperative described in section 1381(a) that is more than

50% owned by agricultural producers or by entities owned

by agricultural producers can elect to allocate any part of

the credit among the patrons of the cooperative. The

credit is allocated among the patrons eligible to share in

patronage dividends on the basis of the quantity or value

of business done with or for such patrons for the tax year.

If the cooperative is subject to the passive activity rules,

include on line 2 any clean fuel production credit from

passive activities disallowed for prior years and carried

forward to this year. Complete Form 8810, Corporate

Passive Activity Loss and Credit Limitations, to determine

the allowed credits that can be allocated to patrons. For

details, see the Instructions for Form 8810.

The cooperative is deemed to have made the election

by completing line 4, as applicable. However, the election

isn’t effective unless (a) made on a timely filed return

(including extensions), and (b) the organization

designates the apportionment in a written notice mailed to

Instructions for Form 7218 (December 2025)

its patrons during the payment period described in section

1382(d) or on Form 1099-PATR.

If you timely file your return without making an election,

you can still make the election by filing an amended return

within 6 months of the due date of the return (excluding

extensions). Enter “Filed pursuant to section 301.9100-2”

on the amended return.

Once made, the election can’t be revoked.

Estates and trusts. Allocate the credit on line 3 between

the estate or trust and the beneficiaries in the same

proportion as income was allocated and enter the

beneficiaries’ share on line 4.

If the estate or trust is subject to the passive activity

rules, include on line 2 any clean fuel production credit

from passive activities disallowed for prior years and

carried forward to this year. Complete Form 8582-CR,

Passive Activity Credit Limitations, to determine the

allowed credit that must be allocated between the estate

or trust and the beneficiaries. For details, see the

Instructions for Form 8582-CR.

Part III—Clean Aviation and

Non-Aviation Transportation Fuel

Produced and Sold After 2024

Column (a)

Enter the type of fuel and if it’s non-SAF or SAF. For more

information on types of fuel that may qualify as

transportation fuel, see the appendix in Notice 2025-10,

available at IRS.gov/irb/2025-06_IRB#NOT-2025-10, and

the appendix in Notice 2025-11 available at IRS.gov/irb/

2025-06_IRB#NOT-2025-11.

Column (b)

Enter the type of feedstock used to produce the fuel. See

the appendix in Notice 2025-11 for the 2025 emissions

rate table, which covers various feedstocks. Future

emissions rate tables will be available on IRS.gov.

All fuel produced after 2025 must be exclusively

derived from a feedstock which was produced or grown in

the United States, Mexico, or Canada.

Column (c)

Enter the four-digit calendar year when the fuel was sold.

Column (d)

Enter the emissions rate or PER value (in kilograms of

CO2e per mmBTU) of the fuel. See Emissions Factor,

earlier.

Column (e)

Subtract the emissions rate or PER value (in kilograms of

CO2e per mmBTU) from 50 kilograms of CO2e. Divide the

result by 50 kilograms of CO2e, then round to the nearest

multiple of 0.1, and enter in column (e).

50 kg of CO2e − emissions rate or PER value (kg of CO2e)

50 kg of CO2e

5

Column (f)

Enter the number of gallons or gallon equivalents of fuel

sold in the calendar year.

Column (g)

Enter the inflation-adjusted applicable amount for the fuel

sold. See Applicable Amount, earlier, to determine which

amount to use.

Column (h)

For all lines with entries, multiply column (e) x column (f) x

column (g) and enter the product in the corresponding line

of column (h). On line 25, add all the column (h) amounts,

and enter on Part II, line 1.

Paperwork Reduction Act Notice. We ask for you to obtain the information on this form to carry out the Internal

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You are not required to obtain the information requested on a form that is subject to the Paperwork Reduction Act

unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be

retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax

returns and return information are confidential, as required by section 6103.

The time needed to complete and file this form will vary depending on individual circumstances. The estimated burden

is approved under OMB control number 1545-0074 for individual filers, under OMB control number 1545-0047 for

tax-exempt filers, under OMB control number 1545-0123 for business filers, and under OMB control number 1545-0092

for trust filers. For the estimated averages, see the instructions for your income tax return.

If you have comments concerning the accuracy of these time estimates or suggestions for making this form simpler,

we would be happy to hear from you. See the instructions for the tax return with which this form is filed.

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Instructions for Form 7218 (December 2025)