KPMG article: Regulatory roadblocks to the clean fuel production credit
Guidance raised questions on the definition of a “qualifying sale” and the use of imported used cooking oil as a feedstock
The section 45Z clean fuel production credit, part of the “Inflation Reduction Act of 2022,” incentivizes production of clean transportation fuels within the United States by offering tax credits to producers who meet specific environmental criteria. The 45Z credit was extended by the “One Big Beautiful Bill” (OB3), enacted July 4, 2025.
Guidance from Treasury and the IRS issued in January, including Notices 2025-10 and 2025-11, raised questions on a number of issues, including the definition of a “qualifying sale” and the use of imported used cooking oil as a feedstock. The notices contained “draft forthcoming proposed regulations.”
Read a June 2025 article* prepared by KPMG LLP tax professionals that explores these two key issues puzzling industry participants.
Read a summary of the credits in KPMG report: Incentives and credits tax provisions in “One Big Beautiful Bill"
* This article originally appeared in The Tax Adviser and is provided with permission.