The 45Z Clean Fuel Production Credit, established under the Inflation Reduction Act, provides a tax credit of up to $1.75 per gallon for clean transportation fuels based on their carbon intensity (CI) score. The lower your proven CI, the higher the credit.
Who Is Eligible
Any domestic producer of clean transportation fuel — including ethanol, biodiesel, renewable diesel, and sustainable aviation fuel — can qualify for the 45Z credit. The key requirement is demonstrating a lifecycle CI score below the applicable baseline.
How the Credit Is Calculated
The credit amount scales linearly with your CI reduction. A fuel with a CI score of zero receives the maximum $1.75/gallon. Higher CI scores receive proportionally less.
For ethanol producers, the primary levers for reducing CI are:
- Feedstock sourcing — grain from fields with documented regenerative practices scores lower
- Energy inputs — renewable electricity and low-carbon thermal energy reduce lifecycle emissions
- Process efficiency — modern production processes with lower energy intensity per gallon
- Carbon capture — on-site CCS can dramatically reduce net CI
Documentation Requirements
The 45Z credit requires audit-ready documentation proving your CI score. This includes:
- Feedstock origin and attribute data
- Energy input metering and documentation
- Production process data
- Chain-of-custody records from field to fuel
- Third-party verification of CI calculations
How Verity Helps
Verity’s Balance engine automates the collection, tracking, and documentation of every attribute that feeds into your CI score. From field-level data through grain origination to fuel production, every step is recorded, timestamped, and audit-ready.