NATSO Submits Comments on IRS Proposed Regulations for ‘Section 45Z’ Clean Fuel Production Tax Credit

NATSO, along with its industry allies, on April 6, 2026, submitted comments to the U.S. Department of Treasury outlining changes to the proposed regulations for the ‘Section 45Z’ Clean Fuel Production Tax Credit that would minimize the ’45Z’ Credit’s structural deficiencies and maximize benefits for consumers in the form of lower retail fuel prices.

NATSO said the ‘45Z’ Credit should be revised to allow credit value transparency through the supply chain to allow biofuel purchasers to determine its value and pass it along to consumers.

In its comments, NATSO outlined specific regulatory options that Treasury can implement to maximize the flow of the tax credit to consumers while minimizing inflationary pressure on retail fuel prices and preserving the technology-neutral character of the credit.

NATSO Comments on IRS Proposed Regulations for ‘Section 45Z’ Clean Fuel Production Tax Credit

In a statement to media, NATSO said, “The real-world implications on American energy supplies and the price that consumers pay at the pump should serve as the regulatory North Star of biofuel policy. The ‘45Z’ Credit is not alleviating these affordability challenges for American consumers and businesses. It has not helped American consumers by lowering fuel prices and it has not helped American farmers by increasing sales of corn or soybeans used to produce renewable fuels. The truth is, ‘45Z’ has failed to help American farmers and American consumers of fuel.”

Key Points in NATSO’s comments:

Importance of Credit Value Transparency: NATSO urged the Treasury Department to establish a mechanism to ensure tax credit value transparency. The proposed rule does not establish such a mechanism. Enabling purchasers of clean transportation fuel to determine the precise credit value associated with the biofuels they purchase will enable them to negotiate prices that reflect that value.

Qualified Sale Definition: NATSO supports the qualified sale definition reflected in the Proposed Rule and urged Treasury to finalize this change. Removal of the “use as a fuel” limitation from the definition of “sold for use in a trade or business” recognizes the commercial reality of the fuel distribution chain, in which producers routinely sell to intermediaries such as wholesalers, terminal operators, and dealers rather than directly to end users. The “use as a fuel” language would have created significant uncertainty for producers selling into existing supply chain structures and risked disqualifying transactions that Congress intended to incentivize.

Emissions Rate Determination and Feedstock Eligibility: NATSO supported the agency’s “diligent and thoughtful” approach to emission rate determination and the Proposed Rule’s requirement that taxpayers use the first version of the 45ZCF-GREET model. Allowing for the use of the most current available version ensures that emissions rate determinations reflect the best available science and prevents market participants from being locked into less favorable, dated versions of the model. At the same time, the Proposed Rule provides producers with the certainty they need to make investment and production decisions at the outset of a taxable year.

Sustainable Aviation Fuel: NATSO commended Congress and the Administration for restoring technology neutrality to the 45Z Credit through the One Big Beautiful Bill Act by eliminating the premium tax credit that disadvantaged over-the-road biofuels relative to aviation fuel. NATSO urged Treasury to carry that principle forward in the implementing regulations and to resist interpretive choices that would replicate the preferential treatment that Congress and President Trump have now expressly repudiated.

Renewable Natural Gas: NATSO supports the inclusion of renewable natural gas as an eligible transportation fuel under the ’45Z’ Credit and urged the Treasury Department to finalize the RNG provisions in a manner that supports the long-term vitality of the RNG industry. RNG dispensed as compressed natural gas at the Associations’ locations represents one of the most commercially mature and scalable low-carbon fuel options available to the heavy-duty trucking sector, and the ’45Z Credit’ has the potential to meaningfully accelerate its adoption.