Statutory overview of 45Z

The document explains the calculation mechanism of the Section 45Z tax credit, which awards credits based on a fuel's carbon intensity, and lists several policy recommendations to prevent market distortions and ensure environmental integrity.

• Section 45Z provides tax credits for clean fuel production based on carbon intensity, awarding higher amounts to cleaner fuels to incentivize deep decarbonization. The credit is calculated by multiplying an "applicable amount" ($1.75 for sustainable aviation fuel and $1.00 for other transportation fuels) by an "emissions factor," which is derived from the fuel's emissions rate relative to a 50 kg CO2 e/mmBTU baseline.
• The Clean Air Task Force (CATF) recommends that the Treasury implement specific safeguards for 45Z to avoid subsidizing fuels without verifiable climate benefits. These include limiting palm oil demand, ensuring indirect land use change is properly accounted for via CORSIA or modified GREET, and differentiating climate-smart agriculture practices based on measurability.

APA

Firth, S. (2024). Statutory overview of 45Z. Clean Air Task Force. https://www.catf.us/2024/08/45z-statutory-overview/

Chicago

Firth, Sammie. Statutory overview of 45Z. Clean Air Task Force, 2024. https://www.catf.us/2024/08/45z-statutory-overview/.

Wikipedia

{{cite report |last1=Firth |first1=Sammie |title=Statutory overview of 45Z |publisher=Clean Air Task Force |date=19 August 2024 |url=https://www.catf.us/2024/08/45z-statutory-overview/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{firth2024statutory, author = {Firth, Sammie}, title = {{Statutory overview of 45Z}}, institution = {Clean Air Task Force}, year = {2024}, month = aug, url = {https://www.catf.us/2024/08/45z-statutory-overview/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }