One of the cleanest fuels for a new federal tax break comes from an unlikely source: cow manure.
That’s one of the quirks of a clean fuels tax credit that’s still being refined by the Treasury Department, which Monday closed out a public comment period on the finer points of implementing the provision from the One Big Beautiful Bill Act.
The credit, in Section 45Z of the federal tax code, rewards producers of transportation fuel that cuts carbon emissions when compared to petroleum. Biogas made from animal manure is one of them — and the Trump administration law spelled out that it’s the only type of fuel that has a negative emissions rate, meaning its production represents a net removal of carbon from the atmosphere.
The manure biogas provision is one of several topics that comes up in public comments submitted to the Treasury Department. Congress initially included the tax credit in the Inflation Reduction Act during the Biden administration; the Republican Congress and the Trump administration extended it and made revisions last year in the Big Beautiful law passed through budget reconciliation.
