The Biden administration Friday issued long-awaited guidance on a new clean fuel tax credit but left most of the details to the incoming Trump administration.
At issue is the credit in Section 45Z of the tax code, which provides for transportation fuels that substantially reduce greenhouse gas emissions compared to petroleum. It’s a top priority for the biofuels industry, where groups said they were disappointed the announcement didn’t shed more light.
In a formal notice, the Treasury Department said it intends to propose regulations implementing the credit, which Congress enacted in the Inflation Reduction Act in 2022. The credit took effect at the beginning of this year.
While the draft proposal provides definitions and other information to be used in the credit’s implementation, it doesn’t address climate-smart practices used to produce the crops used in biofuels — a critical aspect that farm and fuel groups have been awaiting.
