Trump Administration Announces Guidance for 45Z Implementation

The Internal Revenue Service (IRS) released guidance, Notice 2026-53, providing farmers with the long-awaited pathway to fully being able to participate in the 45Z Clean Fuel Production Tax Credit and its role in supporting domestic biofuel production.

The guidance was released alongside the updated Department of Energy’s (DOE) GREET (Greenhouse gases, Regulated Emissions, and Energy use in Technologies) Model. These models offer guidance for determining carbon reduction scores in farming practices and biofuel production.

The notice provides the 2026 emissions table used to calculate the clean fuel production credit and additional guidance to support American biofuel production. It also adopts how the U.S. Department of Agriculture's (USDA) finalized FD-CIC calculator accounts for regenerative agricultural practices reducing the carbon intensity of biofuels.

“This announcement is exciting and comes at the right time for farmers,” said Illinois farmer Chris Gould. “By recognizing the conservation and regenerative practices an opportunity exists to extract value back to the farmer while providing greater certainty for the biofuels industry.”

IL Corn appreciates USDA, DOE and US Treasury's work to establish and incorporate the USDA Feedstock FD-CIC Calculator and recognizes the importance of this guidance in creating opportunities for farmers to participate in the 45Z tax credit. We also hope conversations around a book and claim chain of custody continue, as this approach could help expand opportunities for more farmers to receive the value of lower-carbon feedstocks with greater transparency.

The notice also provides transition rules for applying changes made by the Working Families Tax Cuts (WFTC), including rules addressing used cooking oil and other feedstocks. Among other changes, the law:

• Requires emissions rates to exclude emissions attributable to indirect land use change
• Limits eligible transportation fuel to fuel derived exclusively from feedstocks produced or grown in the United States, Mexico, or Canada
• Prohibits negative emissions rates, except for transportation fuel derived from animal manure
• Requires distinct emissions rates for transportation fuels derived from specific animal manure feedstocks

Learn more about 45Z:

What Illinois Corn Farmers Need to Know about 45Z

What 45Z Means for Corn Farmers