# Section 45Z Clean Fuel Production Credit > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2026-02246 ## Record - **Collection:** Federal Register - **Document type:** Proposed Rule - **Published:** February 4, 2026 - **Citation:** 91 FR 5160 ## Text DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Parts 1 and 48 [REG-121244-23] RIN 1545-BR30 Section 45Z Clean Fuel Production Credit AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking and public hearing. SUMMARY: This document contains proposed regulations regarding the clean fuel production credit enacted by the Inflation Reduction Act of 2022 and amended by the One, Big, Beautiful Bill Act (OBBBA). These proposed regulations would provide rules for determining clean fuel production credits, including credit eligibility rules, emissions rates, and certification and registration requirements. In addition, the proposed regulations would amend three sets of final regulations: the elective payment election regulations and the credit transfer election regulations, to clarify language relating to ownership of clean fuel production facilities, and the Federal excise tax registration regulations, to make them clearer and more consistent with the clean fuel production credit registration requirements in these proposed regulations. The proposed regulations would affect domestic producers of clean transportation fuel, taxpayers that may claim a credit for a related producer's fuel, and excise tax registrants. DATES: Written or electronic comments must be received by April 6, 2026. The public hearing is being held on May 28, 2026, at 10 a.m. Eastern Time (ET). Requests to speak and outlines of topics to be discussed at the public hearing must be received by April 6, 2026. If no outlines are received by April 6, 2026, the public hearing will be cancelled. Requests to attend the public hearing must be received by 5 p.m. ET on May 26, 2026. ADDRESSES: Commenters are strongly encouraged to submit public comments electronically via the Federal eRulemaking Portal at https://www.regulations.gov (indicate IRS and REG-121244-23) by following the online instructions for submitting comments. Requests for a public hearing must be submitted as prescribed in the “Comments and Requests for a Public Hearing” section. Once submitted to the Federal eRulemaking Portal, comments cannot be edited or withdrawn. The Department of the Treasury (Treasury Department) and the IRS will publish for public availability any comments submitted to the IRS's public docket. Send paper submissions to: CC:PA:01:PR (REG-121244-23), Room 5503, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. A plain language summary of the proposed regulations will be made available at https://www.regulations.gov. FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, Jennifer Golden or Danielle Mayfield of the Office of Associate Chief Counsel (Energy, Credits, and Excise Tax) at (202) 317-6855 (not a toll-free number); concerning submissions of comments or the public hearing, Publications and Regulations Section at (202) 317-6901 (not a toll-free number) or by email at publichearings@irs.gov (preferred). SUPPLEMENTARY INFORMATION: Authority This document contains proposed amendments to the Income Tax Regulations (26 CFR part 1) regarding sections 45Z, 1361, 4101, 6417, and 6418 of the Internal Revenue Code (Code) as they relate to the clean fuel production credit determined under section 45Z (proposed regulations). This document also contains proposed amendments to the Manufacturers and Retailers Excise Tax Regulations (26 CFR part 48) regarding section 4101 as they relate to excise tax registration. The proposed regulations would be issued under the authority granted by sections 45Z, 1361(b)(3)(A), 4101(a)(1) and (c), 4222(c), 6001, 6417(h), 6418(h), and 7805(a) of the Code. Section 45Z contains several delegations of authority to the Secretary of the Treasury or the Secretary's delegate (Secretary). Section 45Z(e) directs the Secretary to issue guidance no later than January 1, 2025, regarding implementation of section 45Z, including calculation of emissions factors of transportation fuel, the emissions rate table described in section 45Z(b)(1)(B)(i), and the determination of clean fuel production credits under section 45Z. Section 45Z(f)(2) further authorizes the Secretary to issue regulations regarding the fuel production attributable to the taxpayer in the case of a facility with multiple owners, and section 45Z(f)(1)(A)(i)(II) authorizes the Secretary to issue guidance on certification and other information with respect to certain transportation fuels. Section 45Z(f)(3) authorizes the Secretary to prescribe additional related person rules for other entities similar to the rule described for corporations that are members of an affiliated group of corporations filing a consolidated return. This includes the authority to prescribe rules for related persons with respect to which the taxpayer has reason to believe will sell fuel to an unrelated person in a manner described in section 45Z(a)(4). Section 45Z(d)(5)(C) directs the Secretary to issue regulations or other guidance as the Secretary determines necessary to carry out the purposes of section 45Z(d)(5)(A)(iv), which excludes from the definition of “transportation fuel” any fuel produced from a fuel for which a credit under section 45Z is allowable. Section 45Z(b)(1)(B)(ii) authorizes the Secretary to determine, in the case of any transportation fuel that is not a sustainable aviation fuel (SAF), whether a model is a successor model to the Greenhouse gases, Regulated Emissions, and Energy use in Transportation model developed by the Argonne National Laboratory (ANL). Additionally, section 45Z(b)(1)(B)(i) directs the Secretary, subject to section 45Z(b)(1)(B)(ii) through (v), to annually publish a table setting forth the emissions rate for similar types and categories of transportation fuels based on the amount of lifecycle greenhouse gas (GHG) 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 (CAA-2022) for such fuels, expressed as kilograms of equivalent carbon dioxide (CO 2 e) per 1,000,000 British thermal units (mmBTU), which a taxpayer must use for purposes of section 45Z. The proposed regulations cite to the CAA-2022 as enacted by section 1501(a)(2) of the Energy Policy Act of 2005, Public Law 109-58, 119 Stat. 594, 1067 (2005), amended by section 202(a)(1) of the Energy Independence and Security Act of 2007, Public Law 110-140, 121 Stat. 1492, 1521-22 (2007). Section 45Z(b)(1)(B)(iv) authorizes the Secretary to determine the regulations or methodologies for emissions rate adjustments to exclude any emissions attributed to indirect land use change. Section 45Z(b)(1)(B)(v)(I) requires the Secretary to provide a distinct emissions rate with respect to any transportation fuel derived from animal manure. The emissions rate must be based on the specific animal manure feedstock, which may include dairy manure, swine manure, poultry manure, and any other sources that the Secretary determines to be appropriate. Section 45Z(b)(1)(B)(v)(II) authorizes the Secretary to provide an emissions rate less than zero with respect to any transportation fuel derived from animal manure. Section 1361(b)(3)(A) authorizes the Secretary to prescribe regulations providing exceptions to the subparagraph's treatment of a qualified subchapter S subsidiary (as defined in section 1361(b)(3)(B)) for purposes of the Code. Section 4101(a)(1) authorizes the Secretary to prescribe regulations related to any registration required under section 4101, including the time, form, manner, and terms and conditions of such registration. Section 4101(c) provides that rules similar to the rules of section 4222(c) apply to registration under section 4101. Section 4222(c) authorizes the Secretary to prescribe regulations related to the denial, revocation, or suspension of any registration under section 4222 if the Secretary determines that a registrant has used such registration to avoid the payment of tax or to postpone or interfere with the collection of tax, or that such denial, revocation, or suspension is needed to protect the revenue. Section 6001 authorizes the Secretary to prescribe regulations related to recordkeeping, statements, and special returns. Section 6417(h) directs the Secretary to issue such regulations or other guidance as may be necessary to carry out the purposes of section 6417. Section 6418(h) directs the Secretary to issue such regulations or other guidance as may be necessary to carry out the purposes of section 6418. These regulations would also be issued under the express delegation of authority under section 7805(a) of the Code, which authorizes the Secretary to prescribe all needful rules and regulations for the enforcement of the Code, including all rules and regulations as may be necessary by reason of any alteration of law in relation to Internal Revenue. Background I. Overview Section 45Z, added to the Code by section 13704 of Public Law 117-169, 136 Stat. 1818, 1997 (August 16, 2022), commonly known as the Inflation Reduction Act (IRA), and amended by section 70521 of Public Law 119-21, 139 Stat. 72, 276 (July 4, 2025), commonly known as the OBBBA, provides an income tax credit (section 45Z credit) for clean transportation fuel produced domestically after December 31, 2024, and sold by December 31, 2029. See section 13704(c) of the IRA; section 70521(d) of the OBBBA; section 45Z(g). The section 45Z credit is a general business credit under section 38 of the Code. The section 45Z credit replaces an assortment of prior fuel incentives. Those incentives consisted of income tax credit, excise tax credit, and excise tax payment provisions for various biofuels and other alternative fuels sold for use as a fuel or used as a fuel, including biodiesel, renewable diesel, compressed natural gas, second generation biofuel, and SAF. See sections 40(b)(6); 40A(b)(1) and (2); 40B; 6426(c) through (e) and (k); and 6427(e). Section 4101 authorizes the Secretary to require registration with respect to the section 4041 and section 4081 fuel excise taxes, and requires registration with respect to certain fuel tax credits, including the section 45Z credit. Section 4101(a)(1), as amended by section 70521(i) of the OBBBA, and section 45Z(f)(1)(A)(i)(I) impose a registration requirement under section 4101 (section 4101 registration) on a taxpayer claiming the section 45Z credit. Section 6417, added to the Code by section 13801(a) of the IRA, and amended by sections 70512(j)(2) and 70522(c) of the OBBBA, allows an applicable entity to elect to treat applicable credits (as defined in section 6417(b)), including the section 45Z credit, as a payment against the tax imposed by subtitle A of the Code. Section 6418, added to the Code by section 13801(b) of the IRA, and amended by sections 70512(h), 70513(b)(3)(B)(ii), and 70521(j)(2) of the OBBBA, allows an eligible taxpayer to elect to transfer eligible credits (as defined in section 6418(f)(1)), including the section 45Z credit. A taxpayer making a section 6417 or section 6418 election must also complete pre-filing registration, as provided in regulations under those provisions. This pre-filing registration is distinct from the registration required for the section 45Z credit, which is done under section 4101. II. The Section 45Z Credit A. Credit Eligibility Under section 45Z(a)(1)(A), if a taxpayer qualifies for a section 45Z credit, the taxpayer is eligible to claim a section 45Z credit for the taxable year in which the taxpayer sells a transportation fuel. To qualify for a section 45Z credit, a taxpayer must: (i) produce a transportation fuel that meets the requirements for suitability, emissions rate, coprocessing, and prevention of double crediting; (ii) produce the fuel at a qualified facility in the United States, including in any U.S. territories; (iii) be registered as a producer of clean fuel under section 4101 at the time of production; and (iv) sell the fuel to an unrelated person in a qualified sale during the taxable year. See section 45Z(a)(1) and (4), (d)(4), (d)(5)(A), and (f)(1). Transportation fuel produced after December 31, 2025, must be exclusively derived from a feedstock that was produced or grown in the United States, Mexico, or Canada. See section 45Z(f)(1)(A)(iii); section 70521(a)(2) of the OBBBA. A taxpayer also cannot be: (i) a specified foreign entity, for taxable years beginning after July 4, 2025; or (ii) a foreign-influenced entity (other than a foreign-influenced entity described in section 7701(a)(51)(D)(i)(II) of the Code), for taxable years beginning after July 4, 2027. See sections 45Z(f)(8) and 7701(a)(51). Section 45Z(d)(4) defines “qualified facility” as a facility used for the production of transportation fuels. However, the term “qualified facility” excludes any facility for which one of the following credits is allowed under section 38 for the taxable year: (i) the credit for production of clean hydrogen under section 45V of the Code (section 45V credit); (ii) the credit determined under section 46 of the Code to the extent that such credit is attributable to the energy credit determined under section 48 of the Code with respect to any specified clean hydrogen production facility for which an election is made under section 48(a)(15) (section 48(a)(15) election); and (iii) the credit for carbon oxide sequestration under section 45Q of the Code (section 45Q credit). Because these credits cannot be stacked with the section 45Z credit, this preamble refers to the section 45V credit, the section 48(a)(15) election, and the section 45Q credit collectively as the “anti-stacking credits” and individually as an “anti-stacking credit.” Section 45Z(d)(5)(A) defines “transportation fuel” as a fuel that meets four requirements. First, the fuel must be suitable for use as a fuel in a highway vehicle or aircraft. Second, the fuel must have a lifecycle GHG emissions rate (emissions rate) of not greater than 50 kilograms (kg) of CO 2 e per mmBTU. Section 45Z(d)(1) defines “mmBTU” to mean 1,000,000 British thermal units; section 45Z(d)(2) defines “CO 2 e” to mean, with respect to any GHG, the equivalent carbon dioxide (as determined based on relative global warming potential). Third, the fuel must not be derived from coprocessing an applicable material (or materials derived from an applicable material) with a feedstock that is not biomass. Section 45Z(d)(5)(B)(i) defines “applicable material” to mean monoglycerides, diglycerides, and triglycerides; free fatty acids; and fatty acid esters. Section 45Z(d)(5)(B)(ii) defines “biomass” to have the same meaning as in section 45K(c)(3) of the Code, which provides that biomass means any organic material other than oil and natural gas (or any product thereof), and coal (including lignite) or any product thereof. Fourth, the fuel must not be produced from a fuel for which a section 45Z credit is allowable. In the case of a taxpayer producing a transportation fuel that is SAF, section 45Z(f)(1)(A)(i)(II) requires the taxpayer to provide certification from an unrelated person. 1 For this purpose, section 45Z(a)(3) defines “sustainable aviation fuel,” which these proposed regulations refer to as a “SAF transportation fuel,” to mean the non-kerosene portion of liquid fuel that is a transportation fuel, is sold for use in an aircraft, is not derived from palm fatty acid distillates or petroleum, and meets the requirements of either: (i) ASTM International Standard D7566 or (ii) the Fischer Tropsch (FT) provisions of ASTM International Standard D1655, Annex A1. 1 Both the preamble to the proposed regulations and the proposed regulations use the term “unrelated person” when describing the certification required by section 45Z(f)(1)(A)(i)(II). Section 45Z(f)(1)(A)(i)(II) refers to an “unrelated party,” which is synonymous with an unrelated person as used in section 45Z(a)(4) and (f)(3). Section 45Z(a)(4) requires a taxpayer to sell transportation fuel to an unrelated person: (i) for use by such person in the production of a fuel mixture; (ii) for use by such person in a trade or business; or (iii) who sells such fuel at retail to another person and places such fuel in the fuel tank of such other person. Section 45Z(f)(3) provides that persons are treated as related to each other if they would be treated as a single employer under the regulations prescribed under section 52(b) of the Code. 2 Section 45Z(f)(3) further provides that if a corporation is a member of an affiliated group of corporations filing a consolidated return, such corporation is treated as selling fuel to an unrelated person if another member of the group sells the fuel to an unrelated person. Section 45Z(f)(3) also authorizes the Secretary to prescribe similar sale attribution rules for other related entities, including rules for related persons with respect to which the taxpayer has reason to believe will sell fuel to an unrelated person in a manner described in section 45Z(a)(4). 2 In determining eligibility for the section 45Z credit, a taxpayer must apply the controlled group rules under section 52 consistent with the statutory purpose of section 45Z. Section 45Z(f)(1)(A)(i)(II) requires a taxpayer producing a SAF transportation fuel to provide certification (in such form and manner as the Secretary prescribes) from an unrelated person demonstrating compliance with: (i) any general requirements, supply chain traceability requirements, and information transmission requirements established under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA); or (ii) for any methodology similar to CORSIA that satisfies the criteria under section 211(o)(1)(H) of the CAA-2022, requirements similar to the requirements described for CORSIA. A taxpayer producing a SAF transportation fuel must also provide such other information as the Secretary may require for purposes of carrying out section 45Z. B. Credit Amount Under section 45Z(a)(1), a taxpayer calculates the amount of the section 45Z credit by multiplying the applicable amount per gallon or gallon equivalent with respect to a transportation fuel produced by the taxpayer and sold in a qualified sale by the emissions factor for such fuel. Per section 45Z(a)(5), if the credit amount is not a multiple of one cent, then it is rounded to the nearest cent. A taxpayer's total section 45Z credit for a taxable year is the sum of the section 45Z credit for each transportation fuel sold during the taxable year. 1. Applicable Amount For fuel produced after December 31, 2025, the applicable amount for any transportation fuel is either $0.20 or $1.00. See section 45Z(a)(2); section 70521(g)(2) of the OBBBA. For fuel produced on or before December 31, 2025, the applicable amount varies depending on whether the transportation fuel is a SAF transportation fuel or is not a SAF transportation fuel (non-SAF transportation fuel) and is higher for SAF transportation fuel than for non-SAF transportation fuel. For non-SAF transportation fuel, the applicable amount is either $0.20 or $1.00. Section 45Z(a)(2). For SAF transportation fuel, the applicable amount is either $0.35 or $1.75. Section 45Z(a)(3) (repealed for fuel produced after December 31, 2025, by section 70521(g)(2) of the OBBBA). The increased applicable amount is available if the taxpayer produces the transportation fuel at a qualified facility that satisfies the prevailing wage and apprenticeship (PWA) requirements. Section 45Z(c)(1) provides that for calendar years beginning after 2024, the applicable amount must be adjusted by multiplying such amount by the inflation adjustment factor for the calendar year in which the sale of the transportation fuel occurs. Section 45Z(c)(2) provides that the inflation adjustment factor for the section 45Z credit is the inflation adjustment factor determined and published by the Secretary pursuant to section 45Y(c), determined by substituting “calendar year 2022” for “calendar year 1992” in section 45Y(c)(3). The inflation adjustment factor for purposes of section 45Z means, with respect to a calendar year, a fraction the numerator of which is the gross domestic product (GDP) implicit price deflator for the preceding calendar year and the denominator of which is the GDP implicit price deflator for the calendar year 2022. In this context, the term “GDP implicit price deflator” means the most recent revision of the implicit price deflator for the GDP as computed and published by the Department of Commerce before March 15 of the calendar year. If any inflation-adjusted applicable amount is not a multiple of one cent, it must be rounded to the nearest multiple of one cent. Section 45Z(c)(1). Section 45Z(f)(6)(A) provides that rules similar to the prevailing wage requirements of section 45(b)(7) apply. Section 45Z(f)(6)(B) provides a special rule for qualified facilities placed in service before January 1, 2025, under which such a facility need only satisfy prevailing wage requirements for any alteration or repair in taxable years beginning after December 31, 2024. Section 45Z(f)(7) provides that rules similar to the apprenticeship requirements of section 45(b)(8) apply. Section 1.45Z-3 provides additional rules on the PWA requirements under section 45Z. 2. Emissions Factor and Emissions Rate Under section 45Z(b)(1)(A), a transportation fuel's emissions factor measures the reduction in a fuel's emissions rate, expressed as kg of CO 2 e per mmBTU, relative to the statutory baseline emissions rate of 50 kg of CO 2 e per mmBTU, expressed as a fraction of the statutory baseline. Expressed mathematically, the emissions factor calculation is as follows: (50 kg CO 2 e per mmBTU−emissions rate) ÷ 50 kg CO 2 e per mmBTU Under section 45Z(b)(2), any emissions factor determined under section 45Z(b)(1)(A) that is not a multiple of 0.1 must be rounded to the nearest multiple of 0.1. A taxpayer determines a fuel's emissions rate by either using the annual emissions rate table published by the Secretary or obtaining a provisional emissions rate (PER) determination from the Secretary. See section 45Z(b)(1)(B) and (D). The emissions rate may not be less than zero for any transportation fuel produced after December 31, 2025, except for fuel derived from animal manure. See section 45Z(b)(1)(B)(v) and (b)(1)(E); section 70521(b) and (c)(1) of the OBBBA. Section 45Z(b)(1)(B)(i) directs the Secretary, subject to section 45Z(b)(1)(B)(ii) through (v), to annually publish a table setting forth the emissions rates for similar types and categories of transportation fuels based on the amount of lifecycle GHG emissions as described in section 211(o)(1)(H) of the CAA-2022 for such fuels, expressed as kg of CO 2 e per mmBTU. Section 211(o)(1)(H) of the CAA-2022 defines lifecycle GHG emissions as “the aggregate quantity of greenhouse gas emissions (including direct emissions and significant indirect emissions such as significant emissions from land use changes), as determined by the Administrator [of the Environmental Protection Agency (EPA)], related to the full fuel lifecycle, including all stages of fuel and feedstock production and distribution, from feedstock generation or extraction through the distribution and delivery and use of the finished fuel to the ultimate consumer, where the mass values for all greenhouse gases are adjusted to account for their relative global warming potential.” See also 42 U.S.C. 7602(a). Section 45Z(d)(3) provides that “greenhouse gas” has the same meaning as under section 211(o)(1)(G) of the CAA-2022. Section 45Z divides transportation fuel into two categories for purposes of emissions rates: non-SAF transportation fuel and SAF transportation fuel. Section 45Z(b)(1)(B)(ii) and (iii) provides the methods for determining emissions rates in each case. Section 45Z(b)(1)(B)(ii) provides that for non-SAF transportation fuel, the lifecycle GHG emissions of such fuel must be based on the most recent determinations under the Greenhouse gases, Regulated Emissions, and Energy use in Transportation model developed by the ANL, or a successor model as determined by the Secretary. Section 45Z(b)(1)(B)(iii) provides that for SAF transportation fuel, the lifecycle GHG emissions of such fuel is determined in accordance with: (i) the most recent CORSIA methodologies that have been adopted by the International Civil Aviation Organization (ICAO) with the agreement of the United States; or (ii) any methodology similar to the most recent CORSIA methodologies that satisfies the criteria under section 211(o)(1)(H) of the CAA-2022. Section 45Z(b)(1)(B)(iv) provides that for transportation fuel produced after December 31, 2025, notwithstanding section 45Z(b)(1)(B)(i) through (iii), the emissions rate must be adjusted to exclude any emissions attributed to indirect land use change. See section 70521(c) of the OBBBA. Section 45Z(b)(1)(B)(v) provides that for any transportation fuel derived from animal manure and produced after December 31, 2025, a distinct emissions rate must be provided with respect to such fuel based on the specific animal manure feedstock. Such an emissions rate may be less than zero. See section 70521(c) of the OBBBA. In the case of any transportation fuel for which an emissions rate has not been established in the annual emissions rate table under section 45Z(b)(1)(B), a taxpayer producing such fuel may file a petition with the Secretary for determination of the PER with respect to such fuel. See section 45Z(b)(1)(D). C. Other Rules Section 45Z(f)(2) provides that, if a facility has more than one owner, production from the facility will be allocated among the owners in proportion to their respective ownership interests in the gross sales from such facility, except to the extent provided in regulations prescribed by the Secretary. Section 45Z(f)(4) provides that under regulations prescribed by the Secretary, rules similar to the rules of section 52(d) will apply to a pass-thru in the case of estates and trusts. Section 45Z(f)(5) provides that rules similar to the rules of section 45Y(g)(6) will apply for the allocation of the credit to patrons of an agricultural cooperative. III. Section 4101 Registration Section 4101 of the Code generally provides rules for taxpayer registration. Section 4101(a)(1) provides a specific delegation of authority to the Secretary to prescribe the form and manner of registration by requiring every person required to register under section 4101 to register with the Secretary at such time, in such form and manner, and subject to such terms and conditions, as the Secretary may by regulations prescribe. Section 4101(a)(1) further provides that a section 4101 registration may be used only in accordance with regulations prescribed under section 4101. Section 4101(a)(5) requires reregistration under regulations prescribed by the Secretary in the event of certain changes in ownership. A. Section 45Z Registration Requirement Section 45Z(f)(1)(A)(i)(I) provides that no section 45Z credit shall be determined unless the taxpayer is registered as a producer of clean fuel under section 4101 at the time of production. Section 4101(a)(1) requires registration by “every person producing a fuel eligible for the clean fuel production credit (pursuant to section 45Z),” effective for transportation fuel produced after December 31, 2024. 3 3 See section 13704(b)(5) of the IRA, as amended by section 70521(i) of the OBBBA. B. Denial, Revocation, or Suspension of Registration Under section 4101(c), rules similar to the rules of section 4222(c) apply for purposes of denial, revocation, or suspension of registration under section 4101. Section 4222 generally requires registration for certain tax-free sales under section 4221. Section 4222(c) provides that under regulations prescribed by the Secretary, the registration of any person under section 4222 may be denied, revoked, or suspended if the Secretary determines: (i) that such person has used such registration to avoid the payment of any tax imposed by chapter 32 of the Code (chapter 32), or to postpone or in any manner to interfere with the collection of any such tax, or (ii) that such denial, revocation, or suspension is necessary to protect the revenue. The flush language of section 4222(c) provides that denial, revocation, or suspension under section 4222(c) is in addition to any penalty provided by law for any act or failure to act. Section 48.4222(a)-1 provides rules for registration, including application instructions. Section 48.4222(c)-1 provides rules for revocation or suspension of registration and authorizes the IRS in certain circumstances to revoke or temporarily suspend, upon written notice, the registration of any person under section 4222. IV. Section 6417 Section 6417 permits an applicable entity to elect to treat an applicable credit determined with respect to the applicable entity for the taxable year as a payment against Federal income taxes imposed by subtitle A of the Code equal to the amount of the credit. Section 6417(b)(9) provides that the 45Z credit is an applicable credit. V. Section 6418 Section 6418 permits an eligible taxpayer to elect to transfer all or a portion of an eligible credit determined with respect to such taxpayer for any taxable year to an unrelated taxpayer. Section 6418(f)(1)(A)(viii) provides that the section 45Z credit is an eligible credit. VI. Prior Guidance and Publications A. Notice 2022-58 (Request for Feedback) Notice 2022-58, 2022-47 I.R.B. 483 (released November 3, 2022), requested stakeholder feedback on questions arising under section 45Z that should be addressed in guidance. B. Treasury Decision 9988 (Elective Payment Election Regulations) The Treasury Department and the IRS published Treasury Decision 9988 in the Federal Register (89 FR 17546, March 11, 2024), which finalized regulations concerning the election to treat applicable credits as a payment of Federal income tax under section 6417 (Elective Payment Election Regulations). The Elective Payment Election Regulations contain rules on section 6417 that apply with respect to an applicable credit, including the section 45Z credit. Section 1.6417-2(c)(4) requires an applicable entity or electing taxpayer to own the underlying eligible credit property except in the case of the advanced manufacturing production credit under section 45X. C. Treasury Decision 9993 (Credit Transfer Election Regulations) The Treasury Department and the IRS published Treasury Decision 9993 in the Federal Register (89 FR 34770, April 30, 2024), which finalized regulations concerning the transfer election with respect to eligible credits under section 6418 (Credit Transfer Election Regulations). The Credit Transfer Election Regulations contain rules on section 6418 that apply with respect to an eligible credit, including the section 45Z credit. Section 1.6418-2(d)(1) requires an eligible taxpayer to own the underlying eligible credit property except in the case of the advanced manufacturing production credit under section 45X. D. Notice 2024-49 (Registration Requirement) Notice 2024-49, 2024-26 I.R.B. 1781 (released May 31, 2024), provides guidance on the section 45Z registration requirements, including the time, form, and manner of registration. Section 3 of Notice 2024-49 also provides general definitions, initial definitions of SAF and non-SAF transportation fuels, and an initial, non-exclusive list of primary feedstocks, to help taxpayers applying for registration identify fuels and primary feedstocks that may qualify for the section 45Z credit. Notice 2025-10, 2025-6 I.R.B. 682 (released January 10, 2025), discussed later in this Background section, modifies and supersedes these definitions, and replaces them with the definitions in the Appendix to Notice 2025-10. E. Treasury Decision 9998 (PWA Regulations) The Treasury Department and the IRS published Treasury Decision 9998 in the Federal Register (89 FR 53184, June 25, 2024), which finalized regulations concerning the PWA requirements under several sections of the Code (PWA Regulations), including section 45Z. Section 1.45Z-3 provides rules on the application of the PWA requirements to section 45Z. The preamble to the PWA Regulations contains a detailed discussion of the PWA requirements, including applicability dates and transition rules with respect to the section 45Z credit. These proposed regulations only address § 1.45Z-3 for context and to the extent necessary to clarify the rules herein. The PWA Regulations are otherwise outside the scope of this rulemaking. F. Fact Sheet FAQs A section 45Z Fact Sheet, FS-2024-25 (released July 10, 2024), provides answers to certain frequently asked questions (FAQs) on the section 45Z registration requirements. This Fact Sheet is available at https://www.irs.gov/newsroom/frequently-asked-questions-about-applying-for-registration-for-the-clean-fuel-production-credit-under-ss-45z. G. Notice 2025-10 (Notice of Intent To Propose Rules) Notice 2025-10 announced that the Treasury Department and the IRS intended to propose regulations (forthcoming proposed regulations) addressing the section 45Z credit. In addition to providing background on the section 45Z credit, Notice 2025-10 explains the intended rules to be included in forthcoming proposed regulations and requests public feedback on the draft regulatory text in the Appendix to the notice. These proposed regulations are the forthcoming proposed regulations announced in Notice 2025-10. H. Notice 2025-11 (Emissions Rate Guidance) Notice 2025-11, 2025-6 I.R.B. 704 (released January 10, 2025), provides guidance regarding methodologies for determining emissions rates under section 45Z and provides the initial emissions rate table required by section 45Z(b)(1)(B)(i). Notice 2025-11 also requests feedback related to emissions rates for the section 45Z credit. The public feedback received in response to Notice 2025-10, Notice 2025-11, and Notice 2022-58 was carefully considered in the development of these proposed regulations. I. Notice 2025-37 (2025 Inflation Adjustment Factor) Notice 2025-37, 2025-30 I.R.B. 198 (July 21, 2025), provides the calendar year 2025 inflation adjustment factor and applicable amounts for the section 45Z credit. Explanation of Provisions I. Overview A. Section 45Z Regulations These proposed regulations include six sections relating to section 45Z, proposed §§ 1.45Z-1, 1.45Z-2, 1.45Z-4 through 1.45Z-6, and 1.4101-1. These sections, together with existing § 1.45Z-3, comprise the “section 45Z regulations” referenced in this Explanation of Provisions. The section 45Z regulations would set forth provisions to determine the eligibility for, and the amount of, the section 45Z credit for the production of clean transportation fuel. These proposed regulations would also provide rules for registration and for filing claims for the section 45Z credit. Proposed § 1.45Z-1 would provide the definitions of terms generally applicable for purposes of the section 45Z regulations. Proposed § 1.45Z-2 would provide general rules applicable to section 45Z, such as rules for determining the amount and timing of the credit, including rules for the emissions factor and emissions rate for transportation fuel and the PER process. Proposed § 1.45Z-4 would provide special rules applicable to section 45Z, including required registration, anti-stacking, anti-abuse, production attribution, facility ownership, foreign feedstock and prohibited foreign entity restrictions, and recordkeeping and substantiation rules. Proposed § 1.45Z-5 would provide the procedures for certification of emissions rates for SAF transportation fuel. Proposed § 1.45Z-6 would provide procedures for claiming a section 45Z credit. Proposed § 1.4101-1 would provide rules for registration under section 4101. B. Amendments to Existing Sections 6417, 6418, and 4101 Regulations The proposed regulations would amend §§ 1.6417-2(c), 1.6418-2(d), and 48.4101-1. The proposed amendments to §§ 1.6417-2(c)(4) and 1.6418-2(d)(1) would clarify that sections 45Z and 45(d)(3)(C) do not require a taxpayer to own the underlying eligible credit property. Proposed § 48.4101-1(a)(7) would provide that a letter of registration is not a determination of tax treatment under the Code or a determination letter. Proposed § 48.4101-1(a)(8) would provide rules for reregistration in the event of a change of ownership or a change of employer identification number (EIN). II. Definitions Proposed § 1.45Z-1 would provide definitions that apply for purposes of section 45Z and the proposed regulations. In addition, proposed § 1.45Z-1 would clarify key statutory terms as discussed in Parts II.A. through II.M. of this Explanation of Provisions. The definitions would also adopt the statutory language for the terms “applicable amount” (section 45Z(a)), “applicable material” (section 45Z(d)(5)(B)(i)), “biomass” (section 45Z(d)(5)(B)(ii) ( citing section 45K(c)(3))), “CO 2 e” (section 45Z(d)(2)), “emissions factor” (section 45Z(b)(1)(A)), “greenhouse gas (GHG)” (section 45Z(d)(3)), “lifecycle GHG emissions” (section 45Z(b)(1)(B)(i)), and “mmBTU” (section 45Z(d)(1)), and identify abbreviations used in the proposed regulations, such as “ASTM,” “Code,” U.S. Department of Energy (DOE), EPA, “Secretary,” IRS, “section 45Z credit,” and “section 45Z regulations.” Further, the definitions would specify the relevant CORSIA methodologies, define an emissions rate in accordance with section 45Z(b)(1), and define terms associated with the PER process ( see Part III.F.2. of this Explanation of Provisions). A. 45ZCF-GREET Model Proposed § 1.45Z-1(b)(1) would define “45ZCF-GREET model” as the model by that name developed by the ANL and published by the DOE for use in determining the amount of lifecycle GHG emissions for purposes of section 45Z. The 45ZCF-GREET model is a user interface designed to accept input related to a transportation fuel production facility, execute calculations in the background, and display the full lifecycle (in other words, well-to-wheel) carbon intensity of produced transportation fuel, measured in kg of CO 2 e per mmBTU. 4 The 45ZCF-GREET model is currently available at https://www.energy.gov/eere/greet. All publicly available versions of the 45ZCF-GREET model, the accompanying user manual, additional information including FAQs, and any log of changes to the model are available at https://www.energy.gov/eere/greet. Part III.E.3. of this Explanation of Provisions discusses the use of the 45ZCF-GREET model for purposes of section 45Z(b)(1)(B). 4 As used in the preamble to these proposed regulations, the term “well-to-wheel” includes well-to-wake with respect to aviation fuel. B. Claim Proposed § 1.45Z-1(b)(7) would define “claim” to mean a completed Form 7218, Clean Fuel Production Credit, including all required information and documentation that a taxpayer files with its Federal income tax return or Federal information return for the taxable year for which the section 45Z credit is determined. A “claim” would include the making of an election under section 6417 or section 6418. The proposed regulation would also define “Form 7218” to mean Form 7218 and any successor form(s). These defined terms, coupled with the claim filing procedures in proposed § 1.45Z-6, would explain how a taxpayer may claim a section 45Z credit. C. Fuel Proposed § 1.45Z-1(b)(19) would define “fuel” as any liquid or gaseous substance that can be consumed to supply heat or power. Therefore, for purposes of section 45Z, the term “fuel” would not include electricity. For an additional explanation, see Part II.I.2. of this Explanation of Provisions. D. Gallon Equivalent Section 45Z(a)(1)(A) bases the section 45Z credit on a gallon (or gallon equivalent) of transportation fuel without defining the terms or providing a baseline for non-liquid fuels. The proposed regulations would use a gallon measurement for liquid fuels and a gallon equivalent for non-liquid fuels. Proposed § 1.45Z-1(b)(20)(i) would define “gallon equivalent” for purposes of section 45Z(a)(1)(A) to mean, with respect to any non-liquid fuel, the amount of such fuel that has the energy equivalent of a gallon of gasoline, which refers to the amount of such fuel that has a Btu content of 116,090 (lower heating value). The proposed regulations would use gasoline as the most appropriate baseline fuel for determining gallon equivalency because gasoline is the most common transportation fuel in the United States, and section 45Z is designed to incentivize domestic production of transportation fuels that may serve as alternatives to existing fossil fuels. The use of a gasoline gallon equivalent is also consistent with the gasoline gallon equivalent requirement in section 6426(d)(3), which provided an excise tax credit for many of the same types of fuel that are eligible for the section 45Z credit. Using the gasoline gallon equivalent standard in section 6426(d)(3) in the section 45Z context is further supported by the fact that section 45Z replaced section 6426(d). Proposed § 1.45Z-1(b)(20)(ii) would provide that a fuel is considered non-liquid if it is in a gaseous state at ambient pressure and temperature of 1 atmosphere and 60 degrees Fahrenheit, respectively. To facilitate implementation of a gallon equivalent standard for non-liquid fuels, it is necessary to specify whether the standard is based on a lower heating value or a higher heating value of the baseline fuel, as the two types of heating values have different energy contents. The proposed regulations would use a lower heating value, rather than a higher heating value, because it is a better representation of the useful energy provided by a transportation fuel. Proposed § 1.45Z-1(b)(20)(iii) would explain that the gallon equivalent for a non-liquid fuel is calculated by dividing the lower heating value of that fuel (measured in Btu) by the lower heating value of a gallon of gasoline (116,090 Btu), rounded to 5 decimal places. Proposed § 1.45Z-1(b)(20)(iv) and (v) would provide the lower heating values of some non-liquid fuels and an example of the calculation of a gallon equivalent, respectively. E. Producer and Taxpayer Treated as a Producer 1. In General Proposed § 1.45Z-1(b)(26)(i) would generally define the term “producer” for purposes of section 45Z as the person that engages in the production of a transportation fuel. Proposed § 1.45Z-1(b)(26)(iii) would provide examples illustrating the application of the definition. Section 45Z requires the taxpayer to be registered as a producer of clean fuel but does not specify who the producer is if the production process involves multiple persons and multiple steps. The proposed regulations would clarify this point. 2. Producer of Alternative Natural Gas Proposed § 1.45Z-1(b)(26)(ii) would provide that the “producer” of alternative natural gas, including renewable natural gas (RNG), for purposes of section 45Z is the person that processes the untreated sources of alternative natural gas (processor) to remove water, carbon dioxide, and other impurities such that it is interchangeable with fossil natural gas. This definition would be consistent with the purpose of section 45Z because the processor is the most active participant in the production process, and section 45Z incentivizes production. The definition of “producer” would therefore exclude any person that removes conventional or alternative natural gas (CANG) from a pipeline, compresses it further after removal, and then sells such further-compressed CANG (compressor). Compression of CANG that is already interchangeable with fossil natural gas also would not meet the proposed definition of “production” (see Part II.F. of this Explanation of Provisions). Several stakeholders have raised questions about who should be considered the producer of RNG for purposes of section 45Z. The Treasury Department and the IRS understand that the processor and the compressor are typically different persons, and that the processor typically performs most of the active production and owns (or uses) a facility, as that term is defined in proposed § 1.45Z-1(b)(18). The Treasury Department and the IRS further understand that the compressor typically performs the final compression step before a fuel is used in a vehicle and typically owns (or uses) only compression equipment rather than a facility. As a result, the compressor is not engaging in production of a transportation fuel under section 45Z(a)(1) and the production standard in proposed § 1.45Z-1(b)(27), and would be unable to meet the requirement that transportation fuel be produced at a qualified facility as provided in section 45Z(d)(4) and proposed § 1.45Z-1(b)(28). F. Production Proposed § 1.45Z-1(b)(27)(i) would define “production” (except for purposes of section 45Z(a)(4)(A)) as all steps and processes used to make a transportation fuel. Production would begin with the processing of primary feedstock(s) and end with a transportation fuel ready to be sold in a qualified sale. Production would not include instances in which a person uses a primary feedstock to produce a fuel that meets the same ASTM standard as the primary feedstock. The definition of “production” would also incorporate the rules in section 45Z(f)(1)(A)(ii) and (f)(1)(B) requiring production to occur in the United States. The definition of “production” would further clarify that minimal processing would not qualify as production for purposes of the section 45Z credit. Minimal processing would generally include creating a fuel mixture or otherwise engaging in activities that do not result in a chemical transformation. However, with respect to CANG, production would include processing untreated sources of alternative natural gas to remove water, carbon dioxide, and other impurities such that it is interchangeable with fossil natural gas. Production of CANG would not include compressing CANG that is already interchangeable with fossil natural gas to a higher pressure. Under the proposed regulations, the blending of a transportation fuel into another fuel to create a fuel mixture, regardless of whether the fuel mixture itself satisfies the requirements of section 45Z(d)(5)(A), would not constitute production of a transportation fuel because the blending process would constitute minimal processing. For example, the blending of ethanol and gasoline would not constitute production of a transportation fuel. Further, importing fuel that is largely finished fuel and undergoes only minimal processing in the United States would not constitute production. Proposed § 1.45Z-1(b)(27)(ii) would provide examples of minimal processing, including instances in which the same person engages in production and subsequent blending. In enacting section 45Z, Congress replaced fuel credits and payments that specifically incentivize blending (including the credits under sections 40B and 6426(k), and the payment under section 6427(e)) with the section 45Z production credit. Congress's shift from blending incentives to a production incentive demonstrates that Congress no longer intended to incentivize blending. Therefore, equating production with blending would be contrary to Congress's purpose in enacting section 45Z. G. Qualified Facility 1. Facility Proposed § 1.45Z-1(b)(18) would define a “facility,” as used in section 45Z(d)(4) and the proposed regulations, to mean a single production line that produces a transportation fuel and would include all components that function interdependently to produce a transportation fuel. The definition of “facility” would also clarify the treatment of indirect, post-production, and multipurpose equipment. The definition would, for instance, exclude CANG compression equipment from a facility because it is post-production equipment. The definition would include examples involving carbon capture equipment and SAF transportation fuel. The proposed definition of “facility” is neutral as to geographic proximity of the components of the production line and focuses instead on interdependent pieces of equipment used to produce transportation fuel. This definition is consistent with how provisions of the Code under which similar tax credits are determined define “facility.” It is also consistent with stakeholders' requests that a facility be narrowly defined to minimize overlap with other credits and their concerns that physical boundaries may be inadequate. Accordingly, the proposed definition considers that a section 45Z facility may be co-located with another credit-eligible facility, and that some production equipment may be located upstream or downstream from, or in a different building than, other equipment. 2. Qualified Facility Proposed § 1.45Z-1(b)(28)(i) would incorporate the definitions of “qualified facility” in section 45Z(d)(4) and “facility” in proposed § 1.45Z-1(b)(18) and clarify that a “qualified facility” must satisfy the anti-stacking rules in section 45Z(d)(4)(B) and proposed § 1.45Z-4(b). Proposed § 1.45Z-1(b)(28)(ii) would define the term “anti-stacking credit” to mean any of the three credits listed in section 45Z(d)(4)(B). H. Qualified Sale The draft regulatory text in the Appendix to Notice 2025-10 used the term “qualifying sale.” The proposed regulations would instead use the term “qualified sale.” Proposed § 1.45Z-1(b)(29) would define a “qualified sale” as a sale of a transportation fuel in a manner described in section 45Z(a)(4). The definition would also: (i) clarify the term “sold for use in a trade or business” for purposes of section 45Z(a)(4)(B); (ii) incorporate the sale attribution rule in section 45Z(f)(3) if fuel is sold by another member of the taxpayer's consolidated group (as defined in § 1.1502-1(b) and (h), respectively); and (iii) prescribe an additional sale attribution rule, as authorized by section 45Z(f)(3), for fuel sold by a related person if the taxpayer is not a member of a consolidated group. The draft regulatory text in the Appendix to Notice 2025-10 defined the term “sold for use in a trade or business” to mean sold for use as a fuel in a trade or business within the meaning of section 162 of the Code. The term did not include a sale for blending or for further processing, including use as a primary feedstock to produce another fuel. Many stakeholders raised concerns about the interpretation of “sold for use in a trade or business.” They noted that in the fuel industry, many producers sell to related or unrelated intermediaries, such as wholesalers or dealers, rather than directly to unrelated final purchasers. They asserted that the “use as a fuel” language could prevent all sales for resale, such as those to intermediary dealers or wholesalers, from qualifying for the section 45Z credit. These stakeholders requested that the “use as a fuel” language be removed and that the phrase “use . . . in a trade or business” be incorporated as written in section 45Z(a)(4)(B). Stakeholders also said that a “use as a fuel” limitation could undercut the language in section 45Z(d)(5)(A), which requires only that a transportation fuel be “suitable for use as a fuel in a highway vehicle or aircraft,” but not actually so used. The proposed regulations would adopt the stakeholders' suggestion to remove the “use as a fuel” language from the definition of “sold for use in a trade or business.” Under the proposed regulations, “trade or business” would have the same meaning as in section 162 of the Code. The meaning of “sold for use” would be determined under these proposed regulations and would apply solely for purposes of section 45Z. The proposed regulations would also explicitly clarify that the term “sold for use in a trade or business” includes the sale of fuel to an unrelated person that subsequently resells the fuel in its trade or business. The proposed regulations retain the draft regulatory text from the Appendix to Notice 2025-10 that excludes a sale for blending from the definition of “sold for use in a trade or business.” A sale for blending (if made to an unrelated person) would qualify as a sale for use in the production of a fuel mixture under section 45Z(a)(4)(A) and proposed § 1.45Z-1(b)(29)(i)(A). Therefore, including a sale for blending in the “sold for use in a trade or business” definition, which relates to section 45Z(a)(4)(B), would render a significant part of section 45Z(a)(4)(A) superfluous. The proposed regulations do not retain the draft regulatory text from the Appendix to Notice 2025-10 that defined “sold for use in a trade or business” to exclude a sale for further processing, including use as a primary feedstock to produce another fuel. To prevent double crediting, the OBBBA amended section 45Z(d)(5) to exclude from the definition of a “transportation fuel” any fuel produced from a fuel for which a section 45Z credit is allowable. See section 70521(e) of the OBBBA. This statutory revision suggests that a sale for use as a primary feedstock to produce another fuel may qualify as a sale for use in a trade or business under section 45Z(a)(4)(B). The proposed regulations would align the definition of “sold for use in a trade or business” with the statutory language. The proposed regulations would further define “sold for use in a trade or business” to exclude a sale of fuel to a reseller that subsequently sells the fuel at retail to another person and places the fuel in the tank of such other person. Such a sale (if made to an unrelated person) would be a qualified sale under section 45Z(a)(4)(C) and proposed § 1.45Z-1(b)(29)(i)(C). Therefore, inclusion of such sales in the definition of “sold for use in a trade or business,” which relates to section 45Z(a)(4)(B), would render section 45Z(a)(4)(C) superfluous. As noted earlier, the proposed definition of “sold for use in a trade or business” gives meaning to section 45Z(a)(4)(A) and (C) and is consistent with a plain reading of section 45Z(a)(4)(B). The proposed definition is also consistent with the “suitable for use as a fuel in a highway vehicle or aircraft” language in section 45Z(d)(5)(A). The draft regulatory text in the Appendix to Notice 2025-10 incorporated the sale attribution rule in section 45Z(f)(3) for fuel sold by another member of the taxpayer's consolidated group. Many stakeholders requested the adoption of a broader “look-through” rule for sales made through related intermediaries, so that a taxpayer would be treated as selling fuel to an unrelated person if a related person (for example, a related intermediary dealer or wholesaler) ultimately sold the fuel to an unrelated person. The stakeholders pointed to similar look-through rules that the Treasury Department and the IRS adopted with regard to credits under sections 45 and 45J of the Code in Notice 2008-60, 2008-30 I.R.B. 178, and Notice 2023-24, 2023-13 I.R.B. 571, respectively. The stakeholders expressed that many fuel producers are not organized as corporations and cannot utilize the sale attribution rule under section 45Z(f)(3). After the release of Notice 2025-10, the OBBBA added rulemaking authority to section 45Z(f)(3) that allows the Secretary to prescribe additional related-person sale attribution rules similar to the statutory rule. See section 70521(f) of the OBBBA. Based on this new grant of authority, the proposed regulations would adopt the stakeholders' suggestion regarding a broader look-through rule for sales made through related persons. Proposed § 1.45Z-1(b)(29)(iv) would provide that, for purposes of section 45Z, a taxpayer that is not a member of a consolidated group is treated as selling fuel to an unrelated person if a related person sells the fuel to the unrelated person. This rule would apply to all sales made by related persons except those specifically addressed in section 45Z(f)(3) and proposed § 1.45Z-1(b)(29)(iii). Proposed § 1.45Z-1(b)(29)(v) would provide examples illustrating the definition of “qualified sale,” including the “sold for use in a trade or business” definition as it relates to section 45Z(a)(4)(B), the sale attribution rule for fuel sold by another member of a taxpayer's consolidated group, the sale attribution rule for fuel sold by a related person (other than another member of a taxpayer's consolidated group), and a sale made by a taxpayer that produces and subsequently blends a transportation fuel. I. Transportation Fuel 1. In General Proposed § 1.45Z-1(b)(34) would define “transportation fuel” as provided in section 45Z(d)(5)(A), and would also define associated terms. The proposed regulations would define the term “suitable for use as a fuel in a highway vehicle or aircraft” (suitable for use) to mean that the fuel has practical and commercial fitness for use as a fuel in a highway vehicle or aircraft, or may be blended into a fuel mixture that has practical and commercial fitness for use as a fuel in a highway vehicle or aircraft. The proposed definition of “suitable for use” is consistent with longstanding excise tax rules under § 48.4081-1(c)(2) of the Manufacturers and Retailers Excise Tax Regulations, with which the fuel industry is familiar. The proposed regulations would also clarify that actual use as a fuel in a highway vehicle or aircraft is not required. For example, diesel fuel that has practical and commercial fitness for use as a fuel in a highway vehicle or aircraft, but is ultimately used as marine fuel, would satisfy the “suitable for use” standard. The proposed regulations would further provide that CANG is suitable for use once it is produced so that it is interchangeable with fossil natural gas and would require only minimal processing (for example, further compression or liquefaction) to meet the specifications of ASTM D8080. In addition, the proposed regulations would also provide that a fuel that does not require further processing and that may be blended with or used as a component of taxable fuel (within the meaning of section 4083 of the Code) is suitable for use. The proposed regulations would define the term “produced from a fuel for which a section 45Z credit is allowable,” as used in section 45Z(d)(5)(A)(iv), to mean that a fuel has a primary feedstock that meets the definition of a transportation fuel under section 45Z (without regard to section 45Z(d)(5)(A)(iv)). This proposed rule would prevent double crediting by ensuring that only the first transportation fuel in a production chain qualifies for a section 45Z credit. See section 70521(e) of the OBBBA. Thus, if one fuel is used as a primary feedstock to produce a second fuel, and the first fuel qualifies as a transportation fuel for purposes of section 45Z, the second fuel would not qualify for a section 45Z credit. For instance, SAF produced from ethanol as a primary feedstock, and hydrogen produced from RNG as a primary feedstock, may not qualify as transportation fuel for purposes of section 45Z. However, a fuel could still qualify for a section 45Z credit if its production process uses a transportation fuel solely as a process fuel or other non-primary-feedstock input. The proposed regulations would provide examples illustrating the definitions of “suitable for use” and “produced from a fuel for which a section 45Z credit is allowable.” 2. Electricity The proposed regulations would not include electricity in the definition of “transportation fuel,” for several reasons. Electricity production would therefore be ineligible for the section 45Z credit. First, at the time section 45Z was enacted, the Code contained an assortment of income tax credit, excise tax credit, and excise tax payment provisions for various biofuels and other alternative fuels sold for use as a fuel or used as a fuel. These included incentives for biodiesel, renewable diesel, and several different alternative fuels (including compressed natural gas and second generation biofuel). Joint Committee on Taxation, General Explanation of Tax Legislation Enacted in the 117th Congress, JCS 1-23, at 278 (Dec. 31, 2023). Congress designed the section 45Z credit to replace these incentives, which were only available for liquid or gaseous fuels. See sections 40(b)(6); 40A(b)(1) and (2); 40B; 6426(c) through (e) and (k); 6427(e). Therefore, for purposes of section 45Z, it would be reasonable to understand the term “fuel” as referring to a liquid or gaseous substance that can be consumed to supply heat or power. As a result, the term “transportation fuel” under the proposed regulations would not include electricity. Second, the anti-stacking rules in section 45Z(d)(4)(B) disallow receiving both a section 45Z credit and certain other credits with respect to the same facility for a taxable year. See proposed § 1.45Z-1(b)(28)(ii) (definition of anti-stacking credit); Part IV.B. of this Explanation of Provisions (discussion of anti-stacking rules). The inclusion of the anti-stacking rules indicates that Congress understood the potential for activity at a particular facility to generate multiple credits for a taxable year and wished to foreclose that possibility. However, the section 45Y clean electricity production credit is not included in the anti-stacking rules, which indicates that the production of electricity is not eligible for the section 45Z credit. Thus, Congress's omission of the section 45Y credit from the anti-stacking rules suggests that Congress did not understand the term “fuel” to include electricity for purposes of section 45Z. Further, Notice 2025-10, which stated that the forthcoming proposed regulations intended to exclude electricity as a transportation fuel, was published approximately 6 months before the enactment of the OBBBA. Though the OBBBA amended certain aspects of section 45Z discussed in Notice 2025-10, including the definition of “transportation fuel,” the OBBBA did not amend or clarify the definition of “transportation fuel” to include electricity. Third, the Code already provides a separate credit for clean electricity production under section 45Y. When Congress created the section 45Z credit, it also created the section 45Y credit. Generally, the section 45Y credit is not limited based on how the electricity is ultimately used. If the definition of “transportation fuel” in section 45Z were to include electricity, there would be significant overlap between the electricity eligible for a credit under section 45Z and the electricity eligible for a credit under section 45Y. Further, a reading of section 45Z to include electricity in the definition of “transportation fuel” would not be consistent with Congressional intent in separately enacting section 45Y to incentivize clean electricity production and section 45Z to incentivize production of clean transportation fuel. J. Non-SAF Transportation Fuel Proposed § 1.45Z-1(b)(24)(i) would define “non-SAF transportation fuel” for purposes of section 45Z as any transportation fuel that is not a SAF transportation fuel. Proposed § 1.45Z-1(b)(24)(ii) would provide a non-exclusive list of non-SAF fuels that may qualify as a transportation fuel, as well as descriptions of such fuels. A non-SAF fuel described in proposed § 1.45Z-1(b)(24)(ii) would also need to meet all the other applicable requirements under section 45Z to qualify as a transportation fuel. The list of non-SAF fuels would generally track those fuels listed in section 3.03 of Notice 2024-49. Proposed § 1.45Z-1(b)(24)(ii) would also retain a few modifications that Notice 2025-10 made to the definitions in Notice 2024-49 to address concerns raised by stakeholders. Consistent with Notice 2025-10, the proposed regulations would clarify the description of low-GHG CANG, including the ASTM D8080 reference, and would list ASTM D1152 (neat methanol) as a specification for low-GHG methanol in addition to ASTM D5797 (fuel blend methanol). The Treasury Department and the IRS are cognizant of existing business practices in which producers make fuel that may not meet all the proposed ASTM specifications for that particular fuel. Therefore, the proposed ASTM specifications would be both non-exhaustive and non-exclusive with respect to determining whether a fuel is a transportation fuel for purposes of section 45Z. Prescribing exclusive fuel-by-fuel specifications in these proposed regulations would be impractical and may unintentionally restrict future market developments. The Treasury Department and the IRS request comments on this general approach and whether in some cases additional specificity is needed. K. SAF Transportation Fuel Proposed § 1.45Z-1(b)(30) would define “SAF transportation fuel” to mean SAF as defined in section 45Z(a)(3), and would also define associated terms. Further, the proposed regulations would clarify that a synthetic blending component sold to a person that blends the fuel into a fuel mixture described in ASTM D7566 is “sold for use in an aircraft” within the meaning of section 45Z(a)(3). L. Types and Categories of Transportation Fuel Proposed § 1.45Z-1(b)(35) would define the term “type of transportation fuel” as a particular kind of fuel, and the term “category of transportation fuel” as the unique primary feedstock and pathway used to produce a type of transportation fuel. The definitions would clarify those terms as used in section 45Z(b)(1)(B)(i). M. Unrelated Person Consistent with section 45Z(f)(3), proposed § 1.45Z-1(b)(36) would define the term “unrelated person” as a person not related to the taxpayer. The term “unrelated party” has the same meaning as “unrelated person” for purposes of the certification required by section 45Z(f)(1)(A)(i)(II)(aa). The definition would also incorporate the related person definition in section 45Z(f)(3). III. General Rules Proposed § 1.45Z-2 would provide general rules regarding the section 45Z credit. The proposed regulations would incorporate and clarify the rules in section 45Z(a) through (c) regarding the amount of the credit, the credit calculation, the timing of the credit, emissions factors, and emissions rates (including the emissions rate table and the PER process). A. Amount of Credit Proposed § 1.45Z-2(a)(1) would incorporate and clarify the credit calculation rules in section 45Z(a)(1). Proposed § 1.45Z-2(a)(2) would provide that the volume of a liquid fuel is measured on the basis of gallons adjusted to ambient pressure and temperature of 1 atmosphere and 60 degrees Fahrenheit. The proposed rule would reference proposed § 1.45Z-1(b)(20)(ii) and (iii), respectively, for the determination of whether a fuel is liquid or non-liquid and the calculation of the gallon equivalent of a non-liquid fuel. Proposed § 1.45Z-2(a)(3) would provide rules and examples for the calculation of the section 45Z credit. Proposed § 1.45Z-2(a)(3)(i) would implement the rounding rule provided in section 45Z(a)(5) for credit amounts and would clarify that the rule applies only after multiplying the applicable amount, quantity of fuel, and emissions factor. Proposed § 1.45Z-2(a)(3)(ii) would require pro rata allocation for sales of transportation fuel produced after December 31, 2024, and held in common storage with other fuels. Prior to the enactment of the OBBBA, the applicable amount meant either the base amount provided in section 45Z(a)(2)(A) or the alternative amount provided in section 45Z(a)(2)(B), with an increased base amount and alternative amount for SAF transportation fuel under section 45Z(a)(3)(A). Section 70521(g)(2) of the OBBBA eliminated the increased base amount and alternative amount for SAF transportation fuel produced after December 31, 2025. Proposed § 1.45Z-2(a)(4) would define the term “applicable amount” in accordance with section 45Z(a)(2), as amended by the OBBBA. Under the proposed definition, the alternative amount would apply in the case of any transportation fuel produced at a qualified facility that satisfies the PWA requirements. The base amount would otherwise apply in the case of any transportation fuel produced at a qualified facility that does not satisfy the PWA requirements. Proposed § 1.45Z-2(a)(4)(iv) would implement the inflation adjustment mechanics for the applicable amount provided under section 45Z(c), including the inflation adjustment factor as provided in section 45Z(c)(2). In Notice 2025-37, the Treasury Department and the IRS published the section 45Z inflation adjustment factor for calendar year 2025. The section 45Z inflation adjustment factor for subsequent calendar years will also be published in the Internal Revenue Bulletin. B. Timing of Credit Proposed § 1.45Z-2(b)(1) would clarify that a taxpayer is eligible to claim the section 45Z credit only for the taxable year in which a qualified sale of a transportation fuel occurs, provided the taxpayer meets all other requirements to claim the credit. See section 45Z(a)(1)(A)(ii). Proposed § 1.45Z-2(b)(2) would incorporate the effective date in section 13704(c) of the IRA, which provides that section 45Z applies to transportation fuel produced after December 31, 2024. Proposed § 1.45Z-2(b)(3)(i) would clarify that a transportation fuel may be produced in an earlier taxable year than the taxable year in which the qualified sale of the fuel occurs, but that a qualified sale may not occur before the date the fuel is produced. As a result, if a taxpayer sells transportation fuel before production, the qualified sale would occur on the date of production. Proposed § 1.45Z-2(b)(3)(ii) would provide that a qualified sale occurs at the time of the taxpayer's sale to the unrelated person, or if a related-person sale attribution rule applies, at the time of the related person's sale to the unrelated person. C. Emissions Factor Proposed § 1.45Z-2(c)(1) would incorporate the definition of “emissions factor” provided under section 45Z(b)(1)(A). Proposed § 1.45Z-2(c)(2) would incorporate the emissions factor rounding rule in section 45Z(b)(2) and provide an example. D. Emissions Rate Proposed § 1.45Z-2(d)(1) would incorporate the rules for determining the emissions rate of a transportation fuel in section 45Z(b)(1)(B) and (D). To determine an emissions rate for a fuel, a taxpayer would either use the applicable emissions rate table published by the Secretary or, if the applicable emissions rate table does not establish an emissions rate for the taxpayer's fuel, a PER determined by the Secretary. Proposed § 1.45Z-2(d)(2) would incorporate section 70521(b) and (c)(1) of the OBBBA, which provide that for transportation fuel produced after December 31, 2025, the emissions rate cannot be less than zero, unless such fuel is derived from animal manure. Section 45Z(b)(1)(B)(v), which was added by section 70521(c)(1) of the OBBBA, provides that, notwithstanding that general rule, the Secretary “may provide an emissions rate that is less than zero” for a transportation fuel derived from an animal manure feedstock such as dairy, swine, or poultry manure. Proposed § 1.45Z-2(d)(2) would clarify that the limitation regarding negative emissions rates also applies to any transportation fuel used as a production input. The proposed rule would provide examples illustrating the negative-emissions-rate limitation and the effect of a negative emissions rate on the emissions factor calculation. Proposed § 1.45Z-2(d)(3) would incorporate the rule in section 45Z(b)(1)(B)(iv), which was added by section 70521(c)(1) of the OBBBA, that excludes emissions attributed to indirect land use changes for transportation fuel produced after December 31, 2025. As discussed in Part III.E. and III.F. of this Explanation of Provisions, under proposed § 1.45Z-2(e)(2), the applicable emissions rate table would direct a taxpayer to use the allowed methodologies described in section 45Z(b)(1)(B)(ii) and (iii) and set out in proposed § 1.45Z-2(e)(3), and any PER would be determined pursuant to section 45Z(b)(1)(D) and the procedures in proposed § 1.45Z-2(f). E. Emissions Rate Table 1. In General Proposed § 1.45Z-2(e) would incorporate the rules in section 45Z(b)(1)(B) regarding the annual publication of a table of emissions rates for similar types and categories of transportation fuels (emissions rate table), including the requirement in section 45Z(b)(1)(B)(i) that the emissions rate table be published “[s]ubject to” the requirements in section 45Z(b)(1)(B)(ii) through (v). The Treasury Department and the IRS will annually publish an emissions rate table for each calendar year in the Internal Revenue Bulletin. The annual emissions rate table for calendar year 2025 was published in Notice 2025-11. Proposed § 1.45Z-2(e)(2) would provide rules for identifying the applicable emissions rate table that a taxpayer must use in a given taxable year. Proposed § 1.45Z-2(e)(2)(i) would clarify that the applicable emissions rate table for a taxpayer is the emissions rate table that is in effect on the first day of the taxpayer's taxable year of production. The proposed rule would also clarify that, for production after December 31, 2024, in taxable years beginning before January 1, 2025, the applicable emissions rate table is the emissions rate table effective for 2025. In response to Notice 2025-10, stakeholders requested the ability to use an emissions rate table tied to the year construction of a facility began, regardless of when the taxpayer actually produces a transportation fuel. If a taxpayer begins constructing a facility in 2025 but such facility does not begin producing fuel until a subsequent calendar year, the stakeholders' requested rule would allow the taxpayer to use the emissions rate table for 2025 to determine the emissions rate of its fuel for all taxable years. The proposed regulations would not adopt this suggestion. Section 45Z(b)(1)(B)(i) directs the Secretary to annually publish an emissions rate table and requires taxpayers to use such tables. The statute does not contemplate taxpayers locking in the use of old tables in later years. Additionally, the amount of the section 45Z credit depends in part on the emissions rate of the transportation fuel produced in a given taxable year. Accordingly, the emissions rate of a fuel is properly established using the emissions rate table in effect for the taxable year in which such fuel was produced. The beginning of construction date for the facility in which the fuel is produced has no significance with respect to emissions rates and is unrelated to the actual emissions associated with the production of transportation fuel after the facility is placed in service. Proposed § 1.45Z-2(e)(2)(ii) would clarify that if a taxpayer produces a fuel for which the applicable emissions rate table establishes an emissions rate, the taxpayer must use the corresponding allowed methodologies, as specified in proposed § 1.45Z-2(e)(3), as provided in such table to determine the emissions rate for all such fuel produced during the taxpayer's taxable year. Proposed § 1.45Z-2(e)(2)(iii)(A) would clarify that the applicable emissions rate table establishes the emissions rate for a fuel if the emissions rate table includes both the type and category of that fuel. Proposed § 1.45Z-2(e)(2)(iii)(B) would clarify that if an emissions rate table does not initially include a type or category of fuel, but an allowed methodology is updated to add such type or category of fuel during the calendar year, then that type or category of fuel is considered included in such emissions rate table. The proposed regulations would generally require a taxpayer to use the latest annual emissions rate table (as opposed to prior annual tables) and would prevent the use of outdated modeling. 2. Allowed Methodologies Proposed § 1.45Z-2(e)(3)(i) would provide that a taxpayer producing a fuel for which an emissions rate is established by the applicable emissions rate table must determine the fuel's emissions rate using the allowed methodologies described in proposed § 1.45Z-2(e)(3)(iv) and (v), as directed by the applicable emissions rate table. Proposed § 1.45Z-2(e)(3)(ii) would require a taxpayer to use the first version of an allowed methodology that is publicly available in the taxable year of production and that includes the type and category of the taxpayer's fuel. However, if an updated version of an allowed methodology becomes publicly available after the first day of the taxable year of production (but still within such taxable year), then the taxpayer could choose to treat such updated version as the most recent version of such methodology. This choice would give a taxpayer the flexibility to choose the version of an allowed methodology to use with respect to taxable years for which an updated version of a methodology may be published during a taxpayer's taxable year of production. This would generally ensure that a taxpayer uses the latest modeling and benefits from favorable updates to a methodology, but would not penalize a taxpayer if a methodology is updated unfavorably during the taxable year. The proposed regulations would address the requirement in section 45Z(b)(1)(B)(i) that the emissions rate table be published “[s]ubject to” the requirements in section 45Z(b)(1)(B)(ii) through (v). Proposed § 1.45Z-2(e)(3)(iv) and (v) would identify the allowed methodologies for determining emissions rates for purposes of the emissions rate table described in section 45Z(b)(1)(B)(i). If the applicable emissions rate table establishes the emissions rate for a non-SAF transportation fuel, a taxpayer producing such fuel would determine the fuel's emissions rate using the 45ZCF-GREET model, as directed by the applicable emissions rate table. If the applicable emissions rate table establishes the emissions rate for a SAF transportation fuel, a taxpayer producing such fuel would determine the fuel's emissions rate using the most recent version of the CORSIA Default Life Cycle Emissions Values for CORSIA Eligible Fuels lifecycle approach (CORSIA Default) or the CORSIA Methodology for Calculating Actual Life Cycle Emissions Values lifecycle approach (CORSIA Actual), with the agreement of the United States, or the 45ZCF-GREET model, as directed by the applicable emissions rate table. The proposed regulations would also clarify that, for a given type and category of SAF transportation fuel, a taxpayer must use the same methodology to calculate lifecycle GHG emissions associated with all stages of fuel feedstock production and distribution. Section 45Z(b)(1)(B)(i) requires the emissions rate table to be based on the amount of lifecycle GHG emissions (as described in section 211(o)(1)(H) of the CAA-2022) for such fuels. Section 211(o)(1)(H) of the CAA-2022 defines lifecycle GHG emissions as the aggregate emissions from all stages of the fuel's production and use, including feedstock production and transportation, fuel production and distribution, and use of the finished fuel. This type of lifecycle analysis is referred to as “well-to-wheel” emissions analysis. As a result, for each type and category of transportation fuel, the 45ZCF-GREET model also uses “well-to-wheel” emissions to calculate lifecycle GHG emissions for all stages of fuel production, as well as emissions resulting from use of the fuel in transportation. Section 70521(c)(1) of the OBBBA provides that for fuel produced after December 31, 2025, notwithstanding the CAA reference in section 45Z(b)(1)(B)(i), the emissions rate of a transportation fuel shall exclude any emissions attributed to indirect land use change. See section 45Z(b)(1)(B)(iv). 3. 45ZCF-GREET Model a. In General Section 45Z(b)(1)(B)(ii) provides that in the case of non-SAF transportation fuel, the lifecycle GHG emissions of such fuel must be based on the most recent determinations under the Greenhouse gases, Regulated Emissions, and Energy use in Transportation model developed by the ANL, or a successor model (as determined by the Secretary). The DOE changed the name of the “Greenhouse gases, Regulated Emissions, and Energy use in Transportation” model to “Greenhouse gases, Regulated Emissions, and Energy use in Technologies” in 2020 and it is now generally referred to as the “GREET” model. The GREET model refers to a suite of models, the first version of which was released in 1995 and is now called the Research & Development Greenhouse gases, Regulated Emissions, and Energy use in Technologies (R&D GREET) model. Since 1995, the DOE maintained the GREET model to enable research regarding lifecycle analyses of hundreds of different methods of producing, delivering, and using energy. The R&D GREET model was not designed to be used for determining emissions rates for tax credits, including the section 45Z credit, but the current suite of GREET models includes different versions, some of which are designed to facilitate particular regulatory regimes. As of February 4, 2026 the DOE's GREET website lists the following different versions of the GREET model: R&D GREET, 40BSAF-GREET, 45VH2-GREET, 45ZCF-GREET, CA-GREET4.0, and ICAO-GREET. See https://energy.gov/eere/greet. For purposes of the section 45Z credit, the phrase “most recent determinations under the Greenhouse gases, Regulated Emissions, and Energy use in Transportation model” in section 45Z(b)(1)(B)(ii) is best understood as referring to the most recent determinations under the 45ZCF-GREET model. As discussed in Part III.E.3.b. of this Explanation of provisions, the proposed regulations would also designate the 45ZCF-GREET as a successor model to the GREET model under section 45Z(b)(1)(B)(ii). Some stakeholders have suggested that the R&D GREET model should be used for the section 45Z credit. However, the 45ZCF-GREET model is the only appropriate GREET model to use for purposes of the section 45Z credit because the R&D GREET model is not limited to transportation fuels and includes information that is based on preliminary analyses (that is, analyses that are not yet complete, have significant technical uncertainties, or are still being reviewed by laboratory staff, the DOE staff, or independent experts). See generally GREET, Office of Energy Efficiency & Renewable Energy, DOE, available at https://www.energy.gov/eere/greet. While the R&D GREET model is a valuable tool for characterizing the benefits and impacts of energy technologies in a directional manner and testing new and updated data and parameters, it is designed to provide flexibility in user-defined parameters and methodological choices for a wide variety of research purposes and thus not appropriate for use in policy applications without modifications. Because the R&D GREET model offers users many choices regarding analysis methodology (for example, co-product accounting method and global warming potential values), different users can calculate different emissions rates with respect to the same fuel. Many of these choices would not be appropriate for the specific context of the section 45Z credit given the potentially preliminary nature of much of the information represented in R&D GREET and given that specific representations of activities, and their emissions, are needed in a specific fashion (for example, to comply with the requirements of section 45Z). Given the limitations of some of the data underlying aspects of the R&D GREET model and the fact that the model does not predetermine for the user the methodologies and accounting parameters that are appropriate for compliance with the requirements of section 45Z, R&D GREET does not provide the analytical and methodological specificity necessary to meet the specific objectives or statutory requirements of the section 45Z credit. ANL developed, and the DOE published, the 45ZCF-GREET model as a specific version of the GREET model to determine emissions rates that also meets three key parameters: (i) user-friendliness and consistency, (ii) technical robustness of the pathways represented, and (iii) consistency with the requirements of section 45Z. The 45ZCF-GREET model and the 45ZCF-GREET User Manual are available at https://www.energy.gov/eere/greet. The first version of the 45ZCF-GREET model, released on January 15, 2025, included the most commonly used types and categories of fuel that are anticipated to meet the eligibility requirements to claim the section 45Z credit. The 45ZCF-GREET model and the 45ZCF-GREET User Manual were updated in May 2025; such updates included adding pathways for alternative natural gas from coal mine methane capture and ethanol from U.S. corn wet mills. Additional types and categories of fuel may be added in future versions of the 45ZCF-GREET model. Implementation of the section 45Z credit requires that data used to calculate emissions rates reflect a given taxpayer's specific operations and that such data be independently verifiable to the extent possible. Use of facility-specific verifiable data ensures that the section 45Z credit is available only to those fuels that meet statutory requirements. For certain parameters, bespoke inputs are unlikely to be easily measured by taxpayers and/or independently verifiable with high fidelity, given the current status of verification mechanisms. Thus, certain parameters in the 45ZCF-GREET model are fixed assumptions, referred to as “background data,” that are based on the best available data and may not be changed by users. Alternatively, the “foreground data” in the 45ZCF-GREET model are parameters that must be input by the user. The 45ZCF-GREET User Manual contains further details on background and foreground data. b. 45ZCF-GREET as a Successor Model The Treasury Department and the IRS recognize that the continued existence of the R&D GREET model and periodic updates to both the 45ZCF-GREET model and the R&D GREET model may create uncertainty about which GREET model to use. To address any potential uncertainty, the proposed regulations would invoke the Secretary's express delegation of authority in section 45Z(b)(1)(B)(ii) to require use of the 45ZCF-GREET model as a successor model. In drafting the proposed regulations, the Treasury Department and the IRS considered the statutory definition of the term “lifecycle greenhouse gas emissions” in section 211(o)(1)(H) of the CAA-2022 and the specific objectives of section 45Z. The Treasury Department and the IRS also consulted with the DOE. Accordingly, the proposed regulations would reflect that the 45ZCF-GREET model is a model specifically developed by the ANL as a derivative of and successor to the R&D GREET model to meet the requirements and objectives of section 45Z. c. Most Recent Determinations Under GREET Regardless of any determination by the Secretary of a successor model, the phrase “most recent determinations under the Greenhouse gases, Regulated Emissions, and Energy use in Transportation model” in section 45Z(b)(1)(B)(ii) can be understood to refer to determinations under the most recent version of the 45ZCF-GREET model. As discussed in Part III.E.3.a. of this Explanation of Provisions, the 45ZCF-GREET model is tailored to the administration of the section 45Z credit and includes features that make it easy for taxpayers to use. Use of the most recent version of the 45ZCF-GREET model would also ensure that the pathways and approaches provided for determining “well-to-wheel” emissions for various fuel production processes are of sufficient methodological certainty to be appropriate for determining eligibility for a tax credit. d. SAF Portion of 45ZCF-GREET Model as a Similar Methodology The proposed regulations would allow taxpayers to use the 45ZCF-GREET model to determine emissions rates for SAF transportation fuel (SAF portion of 45ZCF-GREET model). The SAF portion of the 45ZCF-GREET model is a “similar methodology” to CORSIA under section 45Z(b)(1)(B)(iii)(II) because, like the CORSIA fuel lifecycle methodologies, it evaluates the full fuel lifecycle, including all stages of fuel and feedstock production through to the end use of the finished fuel. The DOE worked with the Treasury Department and other Federal agencies to develop the 45ZCF-GREET model, including specifications for and limitations on background and foreground data, to satisfy the statutory requirements of section 45Z. Additionally, in the context of whether the R&D GREET model could be used to determine lifecycle GHG emissions for purposes of section 40B(e)(2), 5 the EPA identified certain necessary components of a lifecycle GHG analysis consistent with section 211(o)(1)(H) of the CAA-2022 that the R&D GREET model lacked. The EPA subsequently determined that the new 40BSAF-GREET 2024 model, created in 2024 for the now-expired SAF credit under section 40B, included the previously identified absent categories of emissions. 6 Similarly, the EPA found that the 45ZCF-GREET model includes the categories of emissions it previously identified as missing from the R&D GREET model, the lack of which made R&D GREET insufficient for calculating lifecycle GHG emissions for purposes of section 211(o)(1)(H) of the CAA-2022. 7 5 As in section 45Z(b)(1)(B)(iii)(II), section 40B(e)(2) requires that a methodology similar to CORSIA must also satisfy the criteria under section 211(o)(1)(H) of the CAA-2022. See also Notice 2024-37, 2024-21 I.R.B. 1191. 6 See Letter from Joseph Goffman, Principal Deputy Assistant Administrator for the Office of Air and Radiation, U.S. Environmental Protection Agency, to Lily Batchelder, Assistant Secretary for Tax Policy, U.S. Department of Treasury (December 13, 2023) (EPA December 2023 Letter), available at https://home.treasury.gov/system/files/136/Final-EPA-letter-to-UST-on-SAF-signed.pdf. 7 See Letter from Joseph Goffman, Assistant Administrator for the Office of Air and Radiation, U.S. Environmental Protection Agency, to Aviva Aron-Dine, Deputy Assistant Secretary for Tax Policy, U.S. Department of Treasury (January 8, 2025) (EPA January 2025 Letter), available at https://home.treasury.gov/system/files/136/January-2025-EPA-letter-to-UST-on-45zcf-GREET-signed.pdf. The 45ZCF-GREET model contains certain necessary components of a lifecycle GHG analysis consistent with section 211(o)(1)(H) of the CAA-2022 as applied for purposes of the section 45Z regulations. 8 The 45ZCF-GREET model is consistent with the requirements of section 45Z(b)(1)(B)(iii). Therefore, emissions rates for SAF transportation fuels calculated using the 45ZCF-GREET model would also be consistent with those requirements as applied for purposes of the section 45Z regulations. See section 45Z(b)(1)(B)(i). 8 The 45ZCF-GREET model includes significant indirect emissions from land use, crop production, and livestock. Due to the OBBBA, indirect emissions from land use, also known as induced or indirect land use change, will be excluded for purposes of transportation fuel produced after December 31, 2025. See section 45Z(b)(1)(B)(iv); section 70521(c) of the OBBBA. e. Other Aspects of 45ZCF-GREET Model In the 45ZCF-GREET model, for purposes of accounting for emissions associated with hydrogen (as a production input), natural gas alternatives (as a production input or as the transportation fuel produced), electricity, and carbon capture and sequestration, rules similar to the rules under section 45V would apply unless otherwise specified by the 45ZCF-GREET model with respect to technical modeling issues or other technical differences. The proposed regulations would also clarify the similar rule for incrementality with respect to the use of energy attribute certificates in the 45ZCF-GREET model. See also § 1.45V-4(d). In January 2025, the United States Department of Agriculture (USDA) published a beta version of the USDA Feedstock Carbon Intensity Calculator (USDA FD-CIC). The beta version of the USDA FD-CIC is undergoing testing, peer review, and public comment in preparation for the publication of a final version of USDA FD-CIC. Following publication of the final version of USDA FD-CIC, the Treasury Department and the IRS anticipate that a section 45Z-specific version of the Feedstock Carbon Intensity Calculator (FD-CIC) module will be included as an input to the DOE's 45ZCF-GREET model (45ZCF FD-CIC) used for calculating carbon intensity adjustments under section 45Z for feedstocks that are produced using certain agricultural practices. Such practices may include no till, reduced till, cover crops, and nutrient management. 45ZCF FD-CIC may undergo periodic updates, including incorporation of new data and methodologies from other FD-CIC versions (for example, USDA FD-CIC, R&D GREET FD-CIC (R&D FD-CIC)), to incorporate more recent data or new data sources, types of practices, feedstock types, or changes to geographic specificity. The results of the 45ZCF FD-CIC are expected to inform the emissions rates calculated under the 45ZCF-GREET model. The Treasury Department and the IRS anticipate that 45ZCF FD-CIC may be used for fuel produced and sold in 2025 even though 45ZCF FD-CIC likely will be published in 2026. The Treasury Department and the IRS anticipate that adoption of 45ZCF FD-CIC would entail additional requirements particular to its use, such as agricultural practice implementation, recordkeeping, and verification, which may include rules similar to those provided in the USDA's technical guidelines for crops used as biofuel feedstocks in 7 CFR 2100, subparts D, E, and F. The Treasury Department and the IRS anticipate publishing additional guidance on these requirements in coordination with the publication of 45ZCF FD-CIC. F. Provisional Emissions Rate (PER) 1. In General Many stakeholders have expressed the urgent need for guidance to clarify the scope and mechanics of the PER process referenced in section 45Z(b)(1)(D), which provides that if the emissions rate table does not establish an emissions rate for a transportation fuel, a taxpayer producing such fuel may file a petition with the Secretary for determination of the emissions rate with respect to such fuel, known as a “PER.” Proposed § 1.45Z-2(f)(1) would establish the procedures a taxpayer must follow to request a PER determination. The proposed regulations would require a taxpayer to submit an emissions value request (EVR) to the DOE and obtain a calculated emissions value letter (CEVL) from the DOE, prior to filing a PER petition. 2. PER Terminology Proposed § 1.45Z-1(b) would define terms associated with the PER procedures set out in proposed § 1.45Z-2(f). Proposed § 1.45Z-1(b)(12) would define “eligible fuel,” for purposes of the PER procedures in proposed § 1.45Z-2(f) and the associated definitions in proposed § 1.45Z-1(b), as either a type of fuel not included in the applicable emissions rate table, or a type of fuel included in the applicable emissions rate table but whose category is not included in the applicable emissions rate table. Proposed § 1.45Z-1(b) would also define terms related to requesting an emissions value (EV) from the DOE, which would be a prerequisite to filing a PER petition. Proposed § 1.45Z-1(b)(15) would define the term “emissions value” or “EV” as the value setting forth the DOE's analytical assessment of the lifecycle GHG emissions associated with the fuel for which the EVR was made. Proposed § 1.45Z-1(b)(17) would define the term “EV applicant” as a taxpayer submitting an EVR for an eligible fuel to the DOE. Proposed § 1.45Z-1(b)(6) would define the term “calculated emissions value letter” or “CEVL” as the letter setting forth the emissions value and DOE control number that the DOE issues to an applicant whose EVR is completed. 3. Threshold Requirements Proposed § 1.45Z-2(f)(2) would provide that the DOE and the IRS, respectively, will deny any EVR or PER petition for a type and category of fuel included in the applicable emissions rate table. The proposed rule would provide that a taxpayer may only request an emissions value, and subsequently a PER determination, for an eligible fuel. Because the section 45Z credit is computed for a type and category of fuel, the proposed rule would also clarify that the DOE and the IRS, respectively, will deny any EVR or PER petition based on a facility rather than a type or category of fuel. 4. Emissions Value Requests Proposed § 1.45Z-2(f)(3) would describe the rules for requesting an EV from the DOE for an eligible fuel. Proposed § 1.45Z-2(f)(3)(i) would direct applicants to follow the guidance and procedures that the DOE will separately publish for EVRs, including the section 45Z EVR process instructions (Instructions). Proposed § 1.45Z-2(f)(3)(i) would also describe common assumptions for EVRs, including the well-to-wheel system boundary and certain accounting rules. Proposed § 1.45Z-2(f)(3)(ii) would describe the information required by the DOE for an EVR. Proposed § 1.45Z-2(f)(3)(ii)(A) would generally require that an EV applicant provide all information required by the DOE's Instructions, including sections of a Class 3 Front-End Engineering and Design (FEED) study (or studies) or other indicator of project maturity, as determined by the DOE, and a completed Section 45Z EVR Form. Proposed § 1.45Z-2(f)(3)(ii)(B) would provide that for an EVR for an eligible fuel that is a category of hydrogen, an EV applicant must first submit a section 45V Emissions Value Request Application in accordance with the process for a PER determination for the section 45V credit, as described in § 1.45V-4(c). The proposed rule would provide that the EV applicant must submit the letter obtained under the section 45V EVR process from the DOE stating the well-to-gate emissions value that the DOE determined with respect to the facility's hydrogen production pathway and the control number that the DOE assigned to the section 45V EVR Application. Once such applicant completes the section 45V EVR process and submits its EVR for purposes of section 45Z, the DOE may issue a CEVL, which would include an EV that fully accounts for the well-to-wheel emissions of such category of hydrogen. The proposed rule would also clarify that if the EV applicant produces such category of hydrogen at multiple facilities, such applicant will need to provide this information for each facility. See Part IV.B. of this Explanation of Provisions for a discussion of the anti-stacking rules between section 45Z and section 45V. 5. Submitting a PER Petition Proposed § 1.45Z-2(f)(4) would provide the exclusive procedures for requesting a PER determination. Proposed § 1.45Z-2(f)(4)(i) would clarify that a taxpayer requests a PER determination by filing a PER petition with the Form(s) 7218 included with the taxpayer's timely filed (including extensions) Federal income tax return or Federal information return for the first taxable year for which the taxpayer claims the section 45Z credit for the eligible fuel to which the PER petition relates. Proposed § 1.45Z-2(f)(4)(ii) would describe the required content of a PER petition, which would consist of the CEVL for each eligible fuel for which the section 45Z credit is being claimed for a given taxable year. 6. Determination of a PER Proposed § 1.45Z-2(f)(5)(i) would provide that a properly filed PER petition is deemed accepted by the IRS, and that the deemed acceptance constitutes the Secretary's determination of the PER. As such, proposed § 1.45Z-2(f)(5)(ii) would clarify that a taxpayer may rely on the EV the DOE provides in a CEVL for purposes of calculating and claiming the section 45Z credit, provided that all information, representations, or other data the taxpayer provided to the DOE in support of the taxpayer's EVR are accurate. G. Relation Back of Emissions Rates (Including PER) Proposed § 1.45Z-2(g) would provide that when an emissions rate is first determined for a type and category of fuel, whether established in an applicable emissions rate table or by a PER determination, that emissions rate will relate back to January 1, 2025. The proposed rule would ensure that even if a taxpayer cannot determine the emissions rate for a type and category of fuel at the time of production, either because such type and category of fuel are not established in the applicable emissions rate table or because the Secretary has not determined a PER, such taxpayer may utilize a later-determined emissions rate for such fuel as of the date of production. IV. Special Rules Proposed § 1.45Z-4 would provide special rules with respect to the determination of a section 45Z credit. Generally, these rules would address the: (i) required registration at the time of production; (ii) anti-stacking rules; (iii) anti-abuse rules; (iv) attribution of production; (v) lack of ownership requirement; (v) foreign feedstocks and prohibited foreign entities; and (vi) specific recordkeeping and substantiation requirements. A. Only Registered Production in the United States Taken Into Account As provided in section 45Z(f)(1), proposed § 1.45Z-4(a) would provide that no section 45Z credit is determined with respect to any transportation fuel unless the taxpayer is registered as a producer of clean fuel (within the meaning of section 4101) at the time of production and the fuel is produced in the United States, which includes any territory of the United States. Proposed § 1.4101-1, which would provide the registration rules under section 4101, is further discussed in Part VII. of this Explanation of Provisions. B. Anti-Stacking Rules As previously discussed in Part II.G.2. of this Explanation of Provisions, section 45Z(d)(4)(B) disallows a section 45Z credit for fuel produced at a facility for which an anti-stacking credit (as defined in proposed § 1.45Z-1(b)(28)(ii)) is allowed. Proposed § 1.45Z-4(b) would provide anti-stacking rules that would govern the interaction between different credits if a facility both produces transportation fuel under section 45Z and engages in other credit-eligible activity. The proposed rule also includes examples. To the extent permitted by statute, the proposed rule would generally preserve taxpayer choice of which credit to claim—a section 45Z credit or an anti-stacking credit—for a taxpayer engaging in multiple credit-eligible activities at the same facility in a taxable year. For instance, a taxpayer producing hydrogen that qualifies for both a section 45V credit and a section 45Z credit can generally choose which credit to claim. In addition to general comments on the proposed anti-stacking rules, the Treasury Department and the IRS request specific comments addressing situations in which a facility either has multiple owners or in which a taxpayer does not own the facility, including administrative and compliance issues arising under those scenarios. Proposed § 1.45Z-4(b)(2) would provide that the determination of whether a facility is a qualified facility is made each taxable year. Therefore, under the proposed rule, a facility may be a qualified facility in one taxable year but not in another taxable year. Additionally, in the case of a taxpayer producing transportation fuel at multiple facilities, the taxpayer would separately determine for each facility whether the fuel was produced at a qualified facility. The proposed rules are consistent with the anti-stacking rules in section 45Z(d)(4)(B), which are tied to the taxable year. Proposed § 1.45Z-4(b)(3) would provide examples illustrating the application of the anti-stacking rules to section 45Z for each of the anti-stacking credits. One example would address situations in which the person claiming an anti-stacking credit for a facility has a different taxable year than the taxpayer producing transportation fuel at that facility. The examples would also clarify that the anti-stacking rules apply regardless of whether the taxpayer or another person claims an anti-stacking credit with respect to a facility. C. Anti-Abuse Rules As indicated in Notice 2025-10, the Treasury Department and the IRS are cognizant of potential abuses of the section 45Z credit, including situations in which a taxpayer produces and sells transportation fuel in a manner that is inconsistent with Congressional intent in enacting section 45Z. The Treasury Department and the IRS are also concerned about other potential abuse, such as circular production, credit churning or wasteful production with no intended use, and abuse of the anti-stacking rules. Proposed § 1.45Z-4(c) would provide that the rules of section 45Z and the section 45Z regulations must be applied in a manner consistent with the purposes of section 45Z and the section 45Z regulations (and the regulations in under sections 6417 and 6418 related to the section 45Z credit), including incentivizing the domestic production and use of clean transportation fuel and ensuring that taxpayers do not circumvent the feedstock origin and anti-stacking rules. Therefore, the proposed rule would provide that no section 45Z credit is determined if the primary purpose of the production and sale of clean transportation fuel is to obtain the benefit of the section 45Z credit in a manner that is wasteful, such as discarding, disposing of, or destroying the transportation fuel without putting it to a productive use. The proposed rule would further provide that whether the production and sale of transportation fuel is consistent with the purposes of section 45Z and the section 45Z regulations (and the regulations in this chapter under sections 6417 and 6418 related to the section 45Z credit) is based on all facts and circumstances. Section 45Z(e) delegates authority to the Secretary to issue guidance regarding implementation of section 45Z, including the determination of section 45Z credits. Therefore, the proposed regulations would provide general anti-abuse rules that are consistent with the three prongs of the section 45Z(a)(4) definition of “sale” (referred to as a “qualified sale” in these proposed regulations) that focus on post-production uses of transportation fuel. The Treasury Department and the IRS request comments on the need for these or additional section 45Z anti-abuse rules. The Treasury Department and the IRS also request comments on the potentially abusive scenarios that should be covered by any anti-abuse rules. D. Production Attributable to the Taxpayer and Section 761(a) Elections Consistent with section 45Z(f)(2), proposed § 1.45Z-4(d) would provide rules for production attributable to the taxpayer. For a facility in which more than one person has an ownership interest (and the arrangement is not classified as a partnership for Federal tax purposes), proposed § 1.45Z-4(d)(1) would provide that production from the facility is allocated among those persons in proportion to their respective ownership interests in the gross sales from the facility. The proposed rule would further provide that each owner's respective allocable share of the section 45Z credit is based on each owner's allocable share of production, determined pursuant to section 45Z and these proposed regulations. Proposed § 1.45Z-4(d)(2) would provide an example of production attributable to the taxpayer. Proposed § 1.45Z-4(d)(3) would address instances in which a facility is owned pursuant to a valid section 761(a) election. E. Facility Ownership Not Required Credit eligibility under section 45Z is tied to production of a transportation fuel at a qualified facility and a subsequent qualified sale of the fuel. There is no statutory requirement that the producer of the transportation fuel own the qualified facility. Proposed § 1.45Z-4(e) would address situations in which the producer does not own the qualified facility at which it produces the transportation fuel, to ensure that production is attributed fairly and accurately in those situations. Proposed § 1.45Z-4(e)(1) would clarify that a taxpayer is not required to own the qualified facility at which it produces transportation fuel for a section 45Z credit to be determined with respect to such fuel. If a taxpayer produces transportation fuel at a qualified facility owned by another person, proposed § 1.45Z-4(e)(2) would attribute that production to the taxpayer unless otherwise specified in the Code or the section 45Z regulations. In the case of a production arrangement under which multiple taxpayers produce transportation fuel at a facility that is not owned by all the taxpayers, production would be allocated among the taxpayers in proportion to their respective interests in the gross sales from that fuel, as determined under the applicable contract or other legal arrangement with respect to the fuel. F. Foreign Feedstock and Prohibited Foreign Entity Restrictions Consistent with section 45Z(f)(1)(A)(iii), as added by section 70521(a) of the OBBBA, proposed § 1.45Z-4(f)(1) would provide that transportation fuel that is produced after December 31, 2025, must be exclusively derived from a feedstock that was produced or grown in the United States, Mexico, or Canada. Consistent with section 45Z(f)(8), as added by section 70521(k) of the OBBBA, proposed § 1.45Z-4(f)(2) would prohibit the determination of a section 45Z credit: (i) for taxable years beginning after July 4, 2025, if the taxpayer is a specified foreign entity; and (ii) for taxable years beginning after July 4, 2027, if the taxpayer is a foreign-influenced entity (other than a foreign-influenced entity that made certain payments to a specified foreign entity). See section 7701(a)(51)(B) and (D) for definitions of the terms specified foreign entity and foreign-influenced entity. G. Specific Recordkeeping and Substantiation Requirements In addition to the general recordkeeping requirements under section 6001 and § 1.6001-1, proposed § 1.45Z-4(g) would require a taxpayer claiming the section 45Z credit to maintain records sufficient to establish the taxpayer's eligibility for the section 45Z credit and the amount of the credit claimed. It would also provide two safe harbors: (i) for substantiating emissions rates with respect to non-SAF transportation fuel; and (ii) for substantiating qualified sales of transportation fuel. The proposed recordkeeping and substantiation requirements are necessary to ensure the accuracy of reported emissions rates and because the amount of the section 45Z credit may depend on certain operational choices, such as use of certain types of feedstocks or fuels, or engaging in certain emissions-reduction practices like carbon capture and sequestration (which may vary from year to year). 1. In General Proposed § 1.45Z-4(g)(1) would provide that at a minimum, sufficient records include records: (i) establishing that each fuel produced is a transportation fuel; (ii) establishing any relevant information relating to the primary feedstock(s) used to produce each fuel; (iii) establishing that each fuel meets any additional specifications for the type of fuel as described in § 1.45Z-1(b)(24) or (30); (iv) substantiating how the emissions rate for each fuel was determined (including, if applicable, the specific type(s) and category(ies) under the applicable emissions rate table); (v) relating to any fuel testing obtained by the taxpayer; (vi) establishing that each facility used to produce fuel is a qualified facility; (vii) establishing the date each facility was placed in service; (viii) establishing that each fuel was sold in a qualified sale; and (ix) establishing any certification from an unrelated person and substantiating the information contained therein. A taxpayer must also keep all information, including raw data, used for or related to any petition for a PER. If a taxpayer is claiming an increased credit amount by satisfying the PWA requirements, the taxpayer must also maintain the records described in § 1.45Z-3 (referencing § 1.45-12). Proposed § 1.45Z-4(g)(2) would provide a safe harbor for substantiating the emissions rate for a non-SAF transportation fuel that was determined using the 45ZCF-GREET model. A taxpayer relying on this safe harbor would need to obtain certification in substantially the same form and manner described in proposed § 1.45Z-5 (related to certification for a SAF transportation fuel) with respect to that non-SAF transportation fuel. The proposed § 1.45Z-5 certification requirements are discussed in Part V. of this Explanation of Provisions. Proposed § 1.45Z-4(g)(3)(i) would provide a safe harbor for substantiating whether the sale of a transportation fuel is a qualified sale for purposes of section 45Z. A taxpayer relying on this safe harbor would need to obtain from the purchaser a certificate prepared by the purchaser under penalty of perjury in substantially the same form and manner as that described in proposed § 1.45Z-4(g)(3)(ii). Proposed § 1.45Z-4(g)(3)(ii) would include a model certificate that a taxpayer may use for purposes of meeting this safe harbor. If the certificate relates to a single purchase, the taxpayer must obtain the certificate from the purchaser prior to or at the time of sale. If the certificate relates to purchases made over a period of time, the taxpayer must obtain the certificate from the purchaser prior to or at the same time as the initial sale to which the certificate relates. The safe harbor would require that a taxpayer have no reason to believe that any information in the certificate regarding the use of the transportation fuel is false. The safe harbor would also require a taxpayer to maintain the certificate with respect to the sale of transportation fuel in its books and records. Additionally, the Treasury Department and the IRS request comments on what types of documentation or other substantiation a taxpayer should maintain to establish: proper determination of a fuel's emissions rate, including the inputs into CORSIA Default, CORSIA Actual, or the 45ZCF-GREET model; certification from an unrelated person for non-SAF transportation fuel; existing systems, industry standards, or customary practices that may be used to substantiate emissions rate and inputs into CORSIA Default, CORSIA Actual, or the 45ZCF-GREET model (or if there are none, how such tracking and verification systems should be developed, with potential timelines regarding development). 2. Foreign Feedstocks Including Used Cooking Oil As explained in Notice 2025-10, the Treasury Department and the IRS remain concerned about the ability to reliably distinguish between imported used cooking oil (UCO) and palm oil, and the resulting risk of crediting ineligible fuels. Furthermore, section 45Z(f)(1)(A)(ii) provides that transportation fuel that is produced after December 31, 2025, must be exclusively derived from a feedstock that was produced or grown in the United States, Mexico, or Canada. As previously discussed in Part IV.F. of this Explanation of Provisions, proposed § 1.45Z-4(f)(1) would implement this statutory change. Consistent with this approach, pathways that use foreign feedstocks (including UCO) for fuel produced after December 31, 2025, will not be available in the 45ZCF-GREET model until the Treasury Department and the IRS publish further guidance. A feedstock is considered a foreign feedstock if it originates from a source (for example, a farm, restaurant, or food processor) and/or is purchased from an aggregator located outside the United States, Canada, or Mexico. The Treasury Department and the IRS are considering appropriate substantiation and recordkeeping requirements for feedstocks imported from Canada and Mexico (including UCO), and request comments on possible approaches with respect to substantiating that any imported feedstocks meet the statutory sourcing requirement. The Treasury Department and the IRS are also interested in any industry practices to track feedstock source(s) that would mitigate potential taxpayer burden while being administrable for the IRS. For example, whether using specific existing business records, a taxpayer could demonstrate that feedstocks exclusively produced in Canada or Mexico did not contain other feedstocks or additives that originated outside of Canada or Mexico. The Treasury Department and the IRS also request comments on purchases from aggregators of UCO and approaches to determine the underlying source(s) of the UCO that are administrable for taxpayers and the IRS. The Treasury Department and the IRS request comments on, for instance, whether there are reliable methods that would indicate the geographic location where seeds originated or crops were grown as a precursor for use as cooking oil, which could be used to determine whether the foreign feedstock limitation in section 45Z(f)(1)(A)(iii) applies. V. Procedures for Certification of Lifecycle Greenhouse Gas Emissions Rates Proposed § 1.45Z-5 would provide rules for certification from an unrelated person of emissions rates for SAF transportation fuel (certification). The rules would describe the content, form, and manner of the required certification under section 45Z(f)(1)(A)(i)(II). Proposed § 1.45Z-5(b) through (f) would provide rules relating to the content of the certification. Proposed § 1.45Z-5(g) would describe the requirements for timely certification. Proposed § 1.45Z-5(h) would provide a model certification. A. Requirements for Certifications 1. In General In general, proposed § 1.45Z-5(b)(1) would provide that for each taxable year for which a taxpayer claims a section 45Z credit for SAF transportation fuel, the taxpayer must obtain a certification from an unrelated person and include such certification with the taxpayer's Form 7218, which is filed with the taxpayer's Federal income tax return or Federal information return, for each qualified facility at which the taxpayer produces SAF transportation fuel. Proposed § 1.45Z-5(b)(2) would provide that the certification described in proposed § 1.45Z-5(b)(1) must be prepared by a qualified certifier (as defined in proposed § 1.45Z-5(b)(3)) and signed by the qualified certifier under penalty of perjury. Proposed § 1.45Z-5(b)(2) would further provide that the certification must include information that is in substantially the same form as the model certification provided in proposed § 1.45Z-5(h). Proposed § 1.45Z-5(b)(2)(i) through (vi) would describe the following information that a certification must contain: (i) a statement from the qualified certifier regarding the production of SAF transportation fuel (production statement); (ii) a statement from the qualified certifier regarding conflicts of interest (conflict statement); (iii) information regarding the qualified certifier, including documentation of the qualified certifier's qualifications (qualified certifier statement); (iv) certain general information about the qualified facility at which the SAF transportation fuel production undergoing certification occurred (qualified facility statement); (v) any documentation necessary to substantiate the certification process given the standards and best practices prescribed by the qualified certifier's accrediting body as they apply to the circumstances of the taxpayer and the qualified facility; and (vi) any other information or documentation required by applicable IRS tax forms or form instructions. 2. Production Statement Proposed § 1.45Z-5(c)(1) would provide that the production statement must state that the qualified certifier performed a certification sufficient for the IRS to determine that any lifecycle GHG emissions data inputs and the operation, during the applicable taxable year, of the qualified facility that produced the SAF transportation fuel for which the section 45Z credit is claimed are accurately reflected in: (i) the number of gallons of SAF transportation fuel produced by the taxpayer that is entered on the Form 7218 with [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2026-02246. Public record. Not legal advice.