IRS Clean Fuel Guidance Comes Out as Tax Credit Takes Effect

Treasury Department and the IRS released guidance Friday on the clean fuel production tax credit that took effect at the beginning of this year.

Notice 2025-10 provides background on the 45Z tax credit, explains the rules the IRS and Treasury intend to propose, and asks for public comments. Notice 2025-11 provides initial guidance on emissions rates to determine the credit.

The guidance comes after months of renewable fuel industry groups asking the IRS for rules on the new credit that encourages the production of fuel with low carbon emissions. The IRS rules will include how producers should calculate the fuel’s ...