A coalition of organizations has called on the U.S. Department of the Treasury and the Internal Revenue Service (IRS) to seek public input regarding recent changes to the Section 45Z Clean Fuel Production Credit. The request was made in a letter addressed to Treasury Secretary Scott Bessent and IRS Commissioner Billy Long.
The groups are responding to modifications included in Section 70521 of the FY25 budget reconciliation bill, Public Law 119-21, which altered several aspects of the 45Z tax credit. One notable change involves adjustments related to Indirect Land Use Change (ILUC), with the statute specifying that any such adjustment must be based on regulations or methodologies determined by the Secretary.
The letter highlights that these calculations are complex and have significant implications for consumers, taxpayers, and environmental outcomes. The signatories argue that allowing public comment would help inform future regulations and IRS guidance on implementing the clean fuel production credit.
The IRS previously accepted public comment when it implemented an earlier version of Section 45Z as part of the Inflation Reduction Act of 2022. Many organizations participated in that process, providing feedback at that time. The coalition is now urging similar engagement for the latest round of modifications introduced by P.L. 119-21.
“Given the complexity of such calculations and their impacts on consumers, taxpayers, and the environment, acceptance of public comments will help inform future regulations and IRS guidance on the clean fuel production credit,” states the letter sent by participating groups.
“We urge the IRS to also seek and accept public comments on recent, significant modifications to 45Z within P.L. 119-21,” they added.
