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American Carbon Alliance Urges Additional Guidance on 45Z

URBANDALE, Iowa (May 21, 2024) – The American Carbon Alliance (ACA) today released a letter to the U.S. Treasury and the Internal Revenue Service urging them to continue to finalize rule making for the IRC Section 45Z Clean Fuel Production Credit, including any required updates to GREET models.

According to the letter from the ACA, the clean fuels market is intricately linked to agricultural inputs, feedstock production, fuel sales, futures trading, intermediary allocations, and other factors. Understanding the new tax structure well in advance is crucial for navigating this complex ecosystem. With the Sec. 45Z credit slated to come into effect on January 1, 2025, their member companies and organizations may encounter significant challenges and business risks if the guidance is not promptly published. Delays in issuing guidance for the Sec. 45Z credit could jeopardize existing production and demand for low-carbon renewable fuels. Timeliness is key for businesses who are anxious to participate in the President’s goals of producing home-grown and produced Sustainable Aviation Fuels.

“This innovative production tax credit marks a significant shift in tax policy. It offers incentives for the domestic production of fuels based on their lifecycle greenhouse gas emissions rates, a first of its kind,” said Tom Buis, ACA CEO. “Our member companies and organizations, including landowners, ethanol producers, carbon capture pipeline companies, farmers and everyday citizens, have eagerly embraced this new energy future for America.”

Read the full letter here.

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