IRS 45Z Hearing Recap: What Treasury’s Questions Signal for the Final Clean Fuel Credit Rule

This is the second post in a series examining Treasury and IRS implementation of the Inflation Reduction Act (IRA) of 2022 and One Big Beautiful Bill Act (OBBBA) of 2025. It is based on the unofficial hearing transcript provided by Tax Analysts, as an official transcript has not yet been released. On May 11, 2026, Bracewell published a companion post on the written comments filed ahead of the hearing. Key Takeaways Treasury and IRS officials broke from typical hearing practice by directly questioning nearly 20 of 78 stakeholders – a signal of heightened regulatory attention to 45Z implementation. Government questions clustered around fuel-type and program eligibility, recordkeeping requirements and the scope of key regulatory definitions. Feasibility of most requested changes hinges on whether Treasury’s existing delegated authority under the IRA/OBBBA is broad enough – or whether Congress would need to act. Debated issues include expanding eligible feedstocks beyond North America, requiring credit-value disclosure on sale documents and narrowing the ‘facility’ definition to ease Prevailing Wage and Apprenticeship (PWA) compliance burdens. Several high-profile issues – including credit interactions between 45Z, 45V and 45Q, and DOE’s GREET model timeline – went unquestioned, though not necessarily indicating lack of importance No official timeline exists for the final rule, but agency officials have said taxpayers may rely on the proposed rules in the interim, and industry widely expects a final rule before year-end 2026. Hearing Overview On May 27-29, 2026, the Treasury and IRS held a telephonic public hearing entitled “Section 45Z Clean Fuel Production Credit.” Seventy-eight stakeholders participated, offering oral presentations to supplement their previously submitted comment letters. The comment period closed April 6, 2026. However, late comments were still being accepted up to about a month after the hearing, with more than 250 comments having been submitted since April 7. Throughout the hearing, stakeholders both commended the government for the regulatory clarifications included in the proposed rule while also requesting further amendments and technical clarifications. According to the official hearing notice, the government panel receiving the testimony included Attorney-Advisor Sarah Jane Bever-Chritton from the Treasury Office of Tax Policy, along with Senior Technician Reviewer Jennifer Golden and Attorneys Danielle Mayfield and Andrew Clark from the IRS Office of Energy, Credits, and Excise Tax (hereinafter collectively referred to as the ‘government’). Typically, Treasury and IRS officials do not ask questions of NPRM hearing participants. However, in this case, the government officials did pose follow-up questions to a number of stakeholders to clarify their testimony, explore proposed alternatives, and better understand the potential compliance implications of the NPRM, potentially signaling heightened attention by regulators to the 45Z credit’s implementation process. Despite the diversity of interests represented across the clean fuels sector, the government’s questions largely concentrated on stakeholders’ suggested changes to the regulatory text, particularly regarding fuel-type and program eligibility, recordkeeping requirements, and rescoping the definitions of regulatory language. The feasibility of Treasury implementing the recommendations posed at the hearing depends on whether Treasury’s delegated authority under the IRA and OBBBA extends sufficiently to implement the stakeholders’ suggestions without further legislation. While there was significant overlap between the inquiries of the government during the hearing regarding the comments submitted by industry, some topics received greater attention than others. Of the 78 presentations, fewer than 20 participants received questions regarding the NPRM. The limited number of government questions does not necessarily mean that items raised within the other testimonies and submitted comments are not of interest to the witness panel. Rather, a lack of questions may be due to the stakeholders’ commentary and oral presentations already providing sufficient information. With these considerations in mind, Bracewell has identified the primary issues that clean-fuel stakeholders raised regarding the existing NPRM language, as well as stakeholder-suggested remedies to address areas of complexity or ambiguity offered in response to the government’s inquiry. Topics of Questions Does the 45Z Credit Duplicate USDA’s Regenerative Agriculture Rules? In the first round of questions from the panel, government officials asked what specific provisions a stakeholder believed should be addressed in the 45Z credit that are not already covered in USDA rules on regenerative agriculture (NB: new final rule on Technical Guidelines for the Production of Regenerative Agricultural Biofuel Feedstocks was published on June 25, 2026). The industry representative explained that the 45Z credit rules governing nitrogen stabilizers are unclear, particularly regarding whether they will be recognized as qualifying emissions-reducing practices when used with Monoammonium Phosphate (MAP) and Diammonium Phosphate (DAP), both of which are commonly applied in biofuel feedstock production. They emphasized that, if these practices are to qualify, the IRS must clarify the specific conditions under which they would count. Such clarity is essential because farmers must meet defined standards for downstream ethanol or sustainable aviation fuel (SAF) producers to claim the associated tax credits. The industry representative requested further clarity on qualifying standards, such as the kinds of tillage included, whether cover crops qualify, and what type of documentation farmers will need in order to prove credit eligibility. They stressed that the documentation clarity is essential given the possibility that records could be generated and falsified with generative artificial intelligence. However, the participant noted that requiring data collection and production for credit eligibility is a manageable requirement for farmers, as data collection on nitrogen stabilizers and production methods is already part of standard farming workflows. They also rejected the idea of the IRS requiring third-party verifiers for compliance audits, arguing that any 45Z audit system should make it optional for farmers to utilize external auditors if they already maintain their own records or use a data aggregation provider. How Should the IRS Audit 45Z Data Aggregation Records? Several stakeholders who provided testimony stressed the importance of data collection for farming workflows, supply chain transparency, and standardizing calculations that determine 45Z Clean Fuel Credit eligibility. The government, responding to a presentation elaborating on how many farmers maintain relevant data but often in fragmented formats, asked the industry representative to recommend effective methods for aggregating credit-eligibility information into coherent, auditable records. The stakeholder suggested that the IRS audit a portion of all 45Z Clean Fuel Tax Credit records annually from approved data aggregation and storage providers. They suggested that their recommended annual audit sampling methodology could utilize statistical sampling, rotational audits or risk-based sampling to verify compliance without requiring a full audit of all relevant records, which the stakeholder argued would be overly burdensome for farmers and data aggregation providers. Can the IRS Expand Feedstock Eligibility beyond North America? The OBBBA amended 45Z Clean Fuel Credit eligibility, requiring that qualifying clean fuels be produced from feedstocks originating in the United States, Mexico or Canada. Following a stakeholder’s oral statements emphasizing the need to maintain the optionality, availability and a robust supply of feedstocks, the government requested clarification that the stakeholder was requesting a broader profile of imported feedstocks to be allowed under new 45Z rules. The stakeholder affirmed the government’s clarifying question, underscoring their argument that all feedstocks regardless of their continent of origin should qualify, positing that expanded eligibility will enhance the affordability of feedstock and facilitate a stable crude market in the United States. When the government pressed the stakeholder on how to enable the use of feedstocks sourced outside North America while preserving the structure of the NPRM, the stakeholder recommended extending the life-cycle carbon-intensity accounting methodology currently applied to North American feedstocks to suppliers worldwide. They argued that applying this life-cycle accounting methodology globally would ensure that feedstocks from both North America and abroad are evaluated under the same standardized sustainability and reporting requirements and the same greenhouse-gas calculation model. The stakeholder contended that this approach would promote equitable standards while preserving national-security access to crude derived from petroleum and oilseeds. However, stakeholder testimonies reflect mixed perspectives on allowing all imported feedstocks to qualify. While some presentations and comments support the suggested importation rule for availability and affordability, other farmers and downstream suppliers testified that allowing all imports to qualify will bolster foreign, fraudulent feedstocks that are unsafe and may be inaccurately labeled. They further noted that modifying the NPRM to allow imported feedstock beyond North America to qualify for 45Z credit would likely require further legislation, since the OBBBA explicitly states that only feedstocks originating in North America are eligible. Should 45Z Credit Value Be Disclosed on Sale Documents? Under both the current 45Z Clean Fuel Tax Credit statute and the associated NPRM, there is no requirement that entities claiming the credit disclose its value during product transfer or sale. Several stakeholders who provided testimony or submitted comments recommended that the rule be amended to require producers to state the value of the 45Z credit on the bill of lading or other related sale documents, regardless of the product’s stage in the fuel supply chain. One government official responded requesting clarification regarding what scenarios the stakeholder requests the proposed rule be amended to require credit value transparency. The stakeholder clarified that anytime a producer claims the credit on their tax return, or transfers the credit to a third party, that the producer be required to disclose the value of the 45Z credit obtained. Due to the layered inputs that determine the specific 45Z credit value at each bespoke facility, such as aggregate operating history, energy use, and low-cultivation crops, subsequent members of the supply chain may experience difficulty accurately determining the credit value. They argued that credit-value transparency would give 45Z-eligible supply chain participants clearer information about the economic value embedded in a product, helping them negotiate contracts on more accurate and equitable pricing terms. Should There Be a Public Disclosure System for 45Z Credit Values? On the second day of the hearing, the government requested follow-up from another hearing participant on their submitted comment suggesting 45Z credit transparency across the entire supply chain. In the stakeholder’s comment, they reiterated several industry members’ requests for credit value transparency, suggesting the establishment of a public disclosure system for 45Z to publicize the value of the credit as the fuel moves downstream. The government requested elaboration on the credit public disclosure proposal, asking whether it is realistic to request 45Z claimants to aggregate disclosure data accurately and within existing fuel production and processing operations. While the stakeholder acknowledged that there are practical difficulties surrounding how much data is collected, accurate, and available, they emphasized that creating a credit disclosure mechanism would be beneficial, even if data is incomplete or certain suppliers cannot produce disclosure. The stakeholder, alongside several others who testified at the hearing, argued that even establishing an optional disclosure system is positive progress towards compelling additional data collection and 45Z credit transparency. Does Denatured Ethanol Qualify Under the New 45Z Production Definition? The NPRM outlines changes to the definition of production for clean transportation fuels. Under the new proposed rule, “production” begins with the processing of primary feedstock(s) and ends with a transportation fuel ready to be sold in a qualifying sale. The rule stipulates that production must involve substantial processing by the producer to create transportation fuel and does not include instances in which a qualifying fuel engages in minimal processing nor when a fuel does not undergo a chemical transformation. The government requested clarification of the process to transform undenatured ethanol into denatured ethanol and explanation as to whether that process meets the NPRM’s new “production” definition. The stakeholder explained that denatured ethanol is produced by adding a small amount of petroleum-based denaturant (a toxic additive used to make ethanol unfit for human consumption) to undenatured ethanol, resulting in denatured ethanol, but there is no actual chemical transformation. The stakeholder observed that undenatured ethanol appears to qualify as a transportation fuel under the new production definition but that denatured ethanol, due to lack of chemical transformation, does not appear to qualify. The stakeholder further argued that this appears to create a regulatory inconsistency that is incompatible with the intent of the 45Z Clean Fuel Production Credit, as most ethanol producers manufacture undenatured ethanol but ultimately sell denatured ethanol to meet export-market requirements that mandate denaturing prior to shipment, and both undenatured and denatured ethanol serve the same functional purpose as transportation fuels. 45Z Prevailing Wage Rules: Should Feedstock Processing Count Toward ‘Facility’? The NPRM defines a “facility” as a single production line that produces a transportation fuel and would include all components that function interdependently to produce a transportation fuel. The definition excludes indirect, post-production and multipurpose equipment. The government sought clarification on a comment requesting that feedstock equipment be excluded from the definition of a facility. The stakeholder requested that Prevailing Wage and Apprenticeship (PWA) begin to apply from the point that feedstock begins its process of converting to a fuel, rather than when the commodity enters a facility, is separated into component parts or is processed into fuel. They argued that under current PWA eligibility criteria, integrated plants must meet PWA requirements for all upstream processing equipment, even if some of the requirements are not part of fuel production. Non-integrated plants lack this equipment and therefore have a lower compliance burden, meaning integrated producers may face significant additional compliance costs to become PWA eligible. To eliminate the discrepancy in compliance requirements for integrated versus non-integrated plants, the stakeholder suggested adopting an eligibility model where PWA requirements apply from the point that a feedstock begins its process of converting to fuel by narrowing the NPRM definition of a “facility.” The narrowed definition would exclude feedstock-processing from the definition of facility, resulting in only fuel-production being considered for PWA eligibility requirements and mitigating the compliance burden imbalances for integrated and non-integrated plants, allowing more integrated plants to qualify for PWA. Entities that do not qualify for the PWA receive only base credit, which is one-fifth of the credit received for PWA qualifying entities. What Minimum Data Production Standards Should Be Required for 45Z Recordkeeping Platforms? The Renewable Fuel Standard (RFS), an Environmental Protection Agency (EPA) program, requires that transportation fuel sold in the United States contain a minimum volume of renewable fuel. The RFS and the section 45Z credit rely on many of the same underlying records, such as feedstock origin, chain of custody and production data. Although legally separate, the vast majority of domestic producers participate in the RFS and section 45Z tax credit programs simultaneously. One stakeholder warned that unless the IRS establishes minimum standards for third-party platforms that producers use to maintain compliance records, participants in the RFS and section 45Z programs will face higher compliance burdens. They argued that the absence of such standards makes it more costly and difficult for producers to generate the data needed to substantiate clean-fuel claims and complete audits. The stakeholder claimed that the absence of minimum requirements for data production results in information gaps for address validation, chain of custody enforcement, and deduplication efforts, ultimately shifting costs downstream and increasing the burden of proving regulatory compliance downstream. They further emphasized the necessity of instituting minimum standards to prevent foreign-operated recordkeepers from demanding additional payment to release compliance records and to deter platforms from incorporating in the United States while operating abroad. The government asked the stakeholder to clarify what type of third-party qualified recordkeeping platforms meet the minimum standard requirements, such as US systems with US personnel and chain of custody enforcement, would meet the stakeholder’s expectations for a “qualified recordkeeping platform.” The stakeholder noted that several existing US platforms meet the minimum standards proposed in their testimony, emphasizing that the key requirement to prevent security risks and strengthen downstream credit transparency is to host collected data within the United States and make it easily available to US regulators. They noted that not necessarily every element of a qualified data platform needs to be kept in the United States, but that specific components relevant to RFS and section 45Z credit audits do. The stakeholder offered that Canada’s Clean Fuel Regulations (CFR) already operate under the type of minimum-standards framework being proposed, requiring that all data supporting CFR credit claims be stored within Canada. As a result, North American producers that participate in both the Canadian CFR and US markets are already meeting the stakeholder’s suggested criteria, creating a practical precedent for establishing similar minimum standards for the US-based RFS and section 45Z credit. The stakeholder further suggested that the CFR model could serve as a model for modifying the NPRM. Can RFS Point-of-Origin Rules Be Used to Determine Feedstock Point-of-Origin under 45Z? Stakeholders also recommended relying on the RFS to amend the NPRM for substantiating the point of origin for waste-based feedstocks, such as used cooking oil (UCO). The EPA has detailed documentation requirements for determining a point of origin. For imported UCO, the RFS has records requirements to ensure oil claimed for the program was previously used for cooking and was not produced from palm, soybean, or other virgin oils and then mislabeled. The NPRM does not currently propose language to prevent similar mislabeling. The government requested elaboration on which RFS rules could be a reference point for developing similar requirements for the section 45Z credit. The stakeholder suggested that the IRS develop point of origin requirements for 45Z credit consistent with those already required under the RFS. Other stakeholders participating in the comment process similarly urged the IRS to adopt the same point of origin requirements for the RFS and the section 45Z credit to simplify compliance, as many fuel producers participate in both programs. How Should RNG Eligibility for the 45Z Credit Be Verified? The government posed several questions regarding upstream RNG’s eligibility for the tax credit under the NPRM, as well as the accepted methods for substantiating RNG credit claims. The government asked the stakeholder to clarify their earlier remarks, confirming that the stakeholder was requesting that the amended NPRM specify whether RNG facilities qualify for the tax credit. The government also sought confirmation that the stakeholder was asking for clarity on the use of book-and-claim accounting and environmental attribute certificates (EACs) if such facilities are eligible. The stakeholder noted that the NPRM should explicitly clarify whether RNG is eligible for the tax credit. They further recommended allowing book-and-claim accounting for upstream RNG while applying mass-balance accounting to renewable-power direct air capture (DAC) systems. For RNG, the stakeholder explained that a producer may supply gas to multiple end users, with some claiming EACs and others not, creating a situation where mass-balance accounting is needed to allocate attributes appropriately. They added that mass-balance would also be necessary if custom upstream natural-gas properties were allowed, since a producer could deliver far more gas overall than any single section 45Z credit recipient receives, requiring proportional allocation of the associated EACs. The stakeholder also recommended amending the NPRM language to eliminate a gap between the standard Greenhouse gases, Regulated Emissions, and Energy use in Technologies (GREET) model and the 45ZCF-GREET model, since GREET allows environmental attribute certificates (EACs) to document renewable natural gas, whereas 45ZCF-GREET does not permit EACs for upstream energy inputs such as natural gas. The stakeholder contended that this inconsistency creates uncertainty about whether producers can use EACs to demonstrate the use of RNG as an upstream energy source when calculating lifecycle emissions under 45Z, and, as a result, fuel producers may be unable to claim the emissions benefits of RNG, even though GREET normally recognizes those attributes. Should 45Z Replace Pro Rata Allocation with Facility-by-Facility Mass Balance? The NPRM proposed a pro rata rule that would require every gallon withdrawn from commingled storage to carry the same proportion of qualified and nonqualified fuel as the total inventory. According to several comments filed in the 45Z docket , this methodology ignores commercial realities and unduly penalizes producers who have no control over the constant inflow and outflow of commingled storage or pipelines. It also creates unnecessary complexity and reduces the volume of fuel that can qualify for the credit. A stakeholder instead recommended allowing something like a facility-by-facility mass balance approach, which would tie qualified sales to the volume of qualified fuel a taxpayer delivers into commingled storage without requiring tracking of all systemwide flows. They emphasized that workable allocation rules and an updated, transparent 45ZCF-GREET model are essential for the credit to function in real markets. The government requested that the stakeholder elaborate on whether they suggest adopting a facility-by-facility mass balance approach only for fuel commingled from multiple producers at a terminal, or whether the approach should extend to fuels that are not stored at terminals. The stakeholder argued the latter, noting that as long as allocation methodologies are applied consistently across a distribution network, a facility-by-facility mass balance approach for commingled fuel should be permitted for the taxpayer’s own tanks and at third-party terminals. Can 45Z Achieve Feedstock Neutrality without Double Crediting? Several stakeholders supported amending the NPRM to include feedstock neutrality, positing that the 45Z credit should not favor or exclude fuels based on their feedstock input(s). Under feedstock neutrality, a fuel will qualify based on its carbon intensity, rather than whether its inputs previously qualified for a 45Z credit. Industry representatives expressed that this principle matters to biofuel producers because many low-carbon fuels are made from intermediate products such as ethanol, biogas, and SAF intermediates, and a rigid reading of the statute could disqualify them simply because one of their inputs was itself a “transportation fuel.” The government sought clarification on how feedstock neutrality could fit within the NPRM considering the statutory fuel-from-fuel prohibition added by lawmakers to the 2022 IRA and carried forward in the OBBBA. The NPRM specifies that a transportation fuel is not eligible for 45Z if it is produced from another fuel for which the credit is “allowable.” The presenting stakeholder suggested that Treasury can achieve both goals by adjusting the definition of a “qualified sale” and making a corresponding change to the cross-referenced statutory provision (1B3-4(3)). The modification to the definition of a “qualified sale” would restore the exclusion of feedstock sales from the definition, thereby preventing double crediting while implementing feedstock neutrality. Significant Topics Not Questioned Several major policy and technical issues raised by stakeholders were notably not addressed through follow-up questioning during the hearing, despite appearing frequently in written comments and testimony. This lack of questioning does not necessarily indicate lack of importance; rather, it may reflect that the government found the record sufficiently developed, either because stakeholder comments and testimonies clearly articulated the problem and proposed remedies, or because the issues are already well-defined within existing regulatory frameworks. These topics may have required less clarification but remain central to the design and implementation of the Section 45Z Clean Fuel Tax Credit regulations. Compliance Burdens and Unresolved Definitions Stakeholders also highlighted compliance burdens and definitional ambiguities that went largely unexamined. These include calls to reduce recordkeeping requirements, clarify agricultural practice standards such as tillage and fertilizer stabilizers, and ensure that verification systems are risk-based rather than uniformly burdensome, such as not requiring a third-party audit when auditable records are already available. The absence of questions on these topics is notable given their practical implications for compliance feasibility and upstream producer eligibility. In addition, unresolved definitional issues remain central, including what constitutes a “qualified sale,” “primary feedstock” or “low-greenhouse-gas hydrogen.” Participants also called for clearer guidance on how overlapping credits, including 45Z, 45V for hydrogen and 45Q for carbon capture, interact with one another. Because this issue was not explored during questioning, project developers may still experience uncertainty as they try to navigate multiple incentive structures. Many broader structural and market design issues were not explored, even though they carry significant strategic importance. These issues include the expansion of Provisional Emissions Rates to support emerging technologies and the need for technology neutral and origin neutral frameworks that reward emissions reductions regardless of feedstock source or production pathway. DOE 45ZCF-GREET Model Timeline The Department of Energy’s (DOE) timeline and implementation responsibilities related to the GREET model and incorporation of tax credit amendments under the OBBBA were also emphasized in stakeholder presentations but not probed through follow-up questioning. In light of continuing delays in releasing a revised 45Z-CF GREET model due to a funding snafu, stakeholders urged DOE to clarify how it will allocate funding going forward and to resolve funding uncertainties to prevent further delays. They called for timely implementation of the Act’s requirements, including development of any new lifecycle emissions models, updates to existing GREET-based methodologies and guidance necessary to operationalize revised credit structures. The absence of discussion on these points left open questions about whether DOE would be able to meet statutory deadlines and provide the analytical tools needed for industry compliance and investment planning before the conclusion of 2026 tax and audit filings. Without a published version of revised compliance updates, some producers and smaller downstream industry groups may be unable to claim the section 45Z tax credit in 2026, despite the eligibility expansion and revised accounting amendments being enacted in 2025. Concerns regarding the 45ZCF-GREET model itself were also prominent. While stakeholders broadly supported the model’s role as the foundational emissions accounting tool, they highlighted issues related to its scope and transparency. Stakeholders urged DOE to release a revised version expeditiously and to ensure that updates are clearly documented and consistently applied across pathways. Stakeholders also commended the government for incorporating into the NPRM OBBBA’s modifications to section 45Z by directing that emissions attributable to indirect land use change (ILUC) be entirely removed from calculations for fuels produced after December 31, 2025, and urged that the 45ZCF-GREET model be similarly updated. Some of stakeholders’ concerns regarding timing and updated content were subsequently alleviated when a new 45ZCF-GREET model was published by the DOE on June 26, 2026. Fuel-Use Definitions, USDA Carbon Intensity Calculator and PER While some specific definitional and methodological issues were raised by the government, several were not explored during follow-up questioning. One recurring issue involved the “suitable for use” requirement, with stakeholders requesting clearer and more flexible definitions to ensure that fuels are not excluded based on narrow or impractical interpretations of end use. Commenters emphasized that the definition should reflect real-world fuel markets and allow for eligibility where fuels are demonstrably capable of being used in transportation, even if not yet widely deployed. Concerns over the timeline for the release of the USDA’s Feedstock Carbon Intensity Calculator (FD-CIC) also featured prominently. Many stakeholders cautioned that delayed rollout could be misaligned with planting cycles and investment decisions. Stakeholders recommended establishing a clear and accelerated release timeline to ensure that producers and farmers can make informed decisions without retroactive disadvantage. The USDA final rule and calculator were subsequently published on June 29, 2026. The Provisional Emissions Rate (PER) process was another area where stakeholders identified both opportunity and risk. While intended to provide flexibility for new or innovative pathways not captured in the 45ZCF-GREET model, commenters emphasized that the lack of procedural guidance, uncertainty around timelines, and the requirement for costly Class 3 FEED studies could significantly limit its practical usability. Stakeholders recommended streamlining the application process, expanding eligibility to include updates to existing pathways, and establishing predictable, timely review frameworks. The eligibility and optionality of CORSIA models for SAF was both supported and discouraged by stakeholders. Those against the CORSIA model highlighted ambiguity around the requirement that acceptable methodologies must be adopted by ICAO “with the agreement of the United States,” noting that there is no clear process for determining such agreement. Supporters urged Treasury and IRS to provide explicit guidance confirming that CORSIA Default and Actual models remain eligible and to allow SAF producers flexibility to choose between CORSIA and 45ZCF-GREET methodologies where appropriate. Together, these unaddressed issues underscore that while the hearing clarified certain regulatory mechanics, many foundational questions about measurement, verification, and market structure remain open as Treasury and IRS move toward finalizing the rule. Outlook The NPRM has now moved into a post-comment, post-hearing phase during which the Treasury Department and IRS are reviewing stakeholder submissions and working toward a final rule. Although the official comment period closed on April 6, 2026, additional comments were still being accepted into the public docket up until about a month following the hearing. At this stage, there is no announced timeline for publication of the final regulations. However, agency officials have indicated that taxpayers may rely on the proposed rules in the interim, and the final rule is widely expected to be issued before the end of the year. The robust commentary and related line of questions from the government suggests that several key areas will be reviewed and expanded on in the final rule, including the definition of a qualified sale, pro rata allocation, feedstock traceability, PWA requirements, double crediting, and the scope of feedstocks and practices included in the 45ZCF-GREET model. The government’s inquiries suggest that requests for additional clarity and concerns with eligibility gaps and unintentionally conflicting RFS-45Z provisions will be investigated and possibly amended in the final rule. The government and stakeholders alike shared support for streamlined compliance procedures while maintaining secure data and enhancing credit eligibility across the clean fuel supply chain. While some topics, such as feedstock neutrality and mandatory downstream credit transparency, saw mixed input across the hearing testimonies, the IRS and Treasury appear poised to incorporate measures that balance transparency, security, and expanded input eligibility within a revised final rule. Frequently Asked Questions What Is the Section 45Z Clean Fuel Production Credit? Section 45Z is a federal tax credit, created under the IRA and amended by the OBBBA, that rewards producers of low-carbon transportation fuels based on the fuel’s lifecycle carbon intensity. What Happened at the May 2026 Section 45Z hearing? Treasury and the IRS held a three-day telephonic hearing on the 45Z NPRM, hearing from 78 stakeholders. In a departure from typical practice, government officials asked follow-up questions of nearly 20 participants on topics including feedstock eligibility, recordkeeping standards and key regulatory definitions. When Will Treasury and the IRS Issue the Final 45Z rule? No official date has been announced. Agency officials have said taxpayers may rely on the proposed rules in the meantime, and industry observers widely expect the final rule to be issued before the end of 2026. Can I Still Submit Comments on the 45Z NPRM? The official comment period closed April 6, 2026, and while Treasury and the IRS kept the docket open for about a month following the hearing, it is now closed. What Are the Most Debated Issues in the 45Z NPRM? The most debated issues include whether feedstock eligibility should expand beyond the United States, Mexico and Canada; whether 45Z credit values should be disclosed on sale documents; how the “facility” definition affects Prevailing Wage and Apprenticeship compliance; and how to prevent double crediting while achieving feedstock neutrality. Special thanks to Kayden Elizabeth Green for her contributions.