NEFI has submitted formal comments to the U.S. Treasury Department and IRS on a proposed rule implementing the Clean Fuel Production Credit, often referred to as the "45Z Credit" after its section in the Internal Revenue Code. The proposed rule comes as comprehensive guidance on implementation of the 45Z Credit has been significantly delayed.

Of note, the proposed rule confirms that fuels need only be "suitable for use" in a highway vehicle or aircraft to qualify for the credit — i.e., they do not need to actually be used for transportation. This is a major victory for NEFI, which has vigorously championed the inclusion of non-transportation applications such as home heating since the credit was first debated on the Senate floor in 2022.

NEFI's comments also support vital clarifications to the "qualifying sale" definition, which now better reflects how fuels actually move through the marketplace, including through mid-stream marketers and other intermediaries. Clean Fuels Alliance America and other renewable fuel advocates actively lobbied for clarity on this issue, which is a critical consideration for the heating oil distribution network in the Northeast and Mid-Atlantic.

Additionally, NEFI urged the timely release of an updated emissions scoring model, the 45ZCF-GREET model, that will support a diverse range of feedstocks, emerging fuels and technologies, and evolving feedstock growing practices and production methods. This is essential, as the credit is valued based on a fuel's emissions factor — so an accurate emissions profile will directly determine the credit's value. If recommendations from NEFI and other groups are adopted, biodiesel and other advanced biofuels should benefit significantly.

The deadline for public comments was yesterday, Monday, April 6, 2026. The agency will next hold a hearing on the proposed rule on Thursday, May 28 in hopes of issuing a final rule this summer.

This regulatory certainty, combined with historic volumes for biomass-based diesel under the Renewable Fuel Standard, translates to a bright future for renewable liquid heating fuels such as Bioheat® fuel. NEFI will continue working to ensure the final rule supports our members' ability to deliver affordable, reliable, and increasingly cleaner-burning heating fuels to millions of American homes.

For more information on this issue, email NEFI President & CEO Jim Collura at jim.collura@nefi.com.