U.S.: government finalizes guidance on 45Z Clean Fuel Production Credit

On July 4, 2025, U.S. President Donald Trump signed into law the One Big Beautiful Bill Act (H.R. 1), a government budget legislation focused on revising U.S. tax policy, modifying energy incentives, and strengthening domestic fuel and agricultural feedstock production. As part of this legislation, the bill extends and updates the Section 45Z Clean Fuel Production Tax Credit, a key mechanism supporting the production of low-carbon transportation fuels.

The 45Z credit was first introduced under the Inflation Reduction Act of 2022 to encourage the production of fuels with lower life cycle greenhouse gas (GHG) emissions. The credit was originally scheduled to be available from 2025 through 2027, offering up to USD 1.00