ACE calls for swift implementation of 45Z Clean Fuel Production Credit

ACE comments highlight how the 45Z credit can be leveraged to unlock new markets for farmers and biofuel producers, supporting certainty and economic growth at a time when they have a lot of money on the line.

The 45Z credit not only promotes US energy security but can also create good-paying jobs and unlock new markets for farmers and domestic biofuel producers, stated Brian Jennings, CEO of ACE, in the comments.

Today, the value of US corn production has fallen, and input costs have risen. ACE’s comments cite National Corn Growers Association (NCGA) data that farmers are forecast to experience their third consecutive year of net profit losses in 2025, projected to lose more than US$160 per acre on average.

Recently, the Farmer First Fuel Incentives Act was introduced in Congress. This bipartisan and bicameral legislation would extend the life of 45Z to December 31, 2034, beyond its current 2027 expiration date, and provide much-needed long-term certainty. But we also need the final rules for this critical tax credit. Treasury should rapidly finalize 45Z guidance and include the technical guidelines for biofuel crops and the carbon intensity calculator developed by USDA in the final 45Z rules so ethanol producers and farmers can unlock new market opportunities, Brian Jennings added.

Among key recommendations in ACE’s comments:

• Support for the 45ZCF-GREET Model: ACE strongly supports the use of the most current 45ZCF-GREET model to determine emissions reductions from clean fuels and recommends that the Treasury consistently update the model to reflect the best available science.
• Integration of USDA Guidelines and Carbon Intensity Calculator: ACE called on Treasury to fully adopt USDA’s Feedstock Carbon Intensity Calculator (FD-CIC) and technical guidelines for biofuel feedstocks into 45Z. These tools, grounded in real-world data—like the ACE-led Regional Conservation Partnership Program projects—enable accurate lifecycle emissions assessments and allow farmers to “stack” conservation practices for enhanced benefits.

While we support the 45ZCF-GREET model for both non-aviation and aviation fuel in 45Z, the modeling is incomplete until and unless Treasury and the IRS fully incorporate the USDA technical guidelines for biofuel crops used as feedstocks and their FD-CIC tool into the final regulations, ended Brian Jennings.