IRC §45Z · production credit

Section 45Z: selling the Clean Fuel Production Credit

A per-gallon credit for low-emission transportation fuel produced in the United States, extended to fuel sold through 2029 and now a meaningful slice of the transfer market.

Verified 11 Oct 2026 · IRS Form 7218, Clean Fuel Production Credit

Who earns it and how it is measured

The credit goes to a producer of transportation fuel at a qualified facility in the United States, for fuel produced after 2024 and sold^[1]. Only registered production counts: the producer must be registered with the IRS and the fuel produced in the United States^[1].

The amount is the applicable amount per gallon multiplied by the fuel’s emissions factor, so cleaner fuel earns more. The applicable amount is 20¢ per gallon, or $1.00 where the facility meets the prevailing wage and apprenticeship requirements; both are adjusted for inflation after 2024^[1].

What changed in 2025

• Extended to 2029. The credit now applies to fuel sold through 31 December 2029^[1].
• North American feedstock. For fuel produced after 2025, the fuel must be derived exclusively from feedstock produced or grown in the United States, Mexico or Canada^[1].
• No extra rate for sustainable aviation fuel produced after 2025^[1].
• No negative emissions rates. For fuel produced after 2025, the emissions rate used for the credit may not be less than zero^[1].
• Foreign entities. No credit for tax years beginning after 4 July 2025 if the producer is a specified foreign entity, and no transfers of the credit to one^[1][2].

Selling it

1. Register for the transfer election through the IRS pre-filing registration, separately from your fuel-producer registration^[3][4].
2. Claim on Form 7218^[5] and report the transfer on Form 3800, Part III, column (f)^[6].
3. Attach the transfer election statement to an original, timely return^[7].

What buyers ask for on a §45Z deal: the producer registration; the emissions rate for each fuel and how it was determined; feedstock origin records; production and sales records; and evidence that sales were to unrelated persons. §45Z entered the transfer market in 2025 and made up nearly 6.8% of market volume in the second half of that year^[8].

The market. Crux observed $1.7 billion of §45Z transactions in the first half of 2026, more than the $1.1 billion for all of 2025, helped by limited foreign-entity risk and policy clarifications from Treasury and the Department of Energy^[9]. §45Z credits have priced below most others: an average of $0.908 in 2025, which Crux links to their recent arrival in the market, the extra verification they need, their production characteristics and guidance that was then pending^[8]. Current indications run from about $0.85 to $0.93^[10], or $0.87 to $0.92^[11]; certainty about the emissions score and the producer’s financial strength move a deal within that range^[10]. Every report side by side: prices.

Common mistakes

• Confusing the two registrations. The fuel-producer registration does not replace the pre-filing registration for the transfer election^[3].
• Using pre-2026 rules for 2026 fuel. The feedstock, aviation and emissions-rate changes apply to fuel produced after 31 December 2025^[1].

Frequently asked questions

Is §45Z transferable?

Yes, the clean fuel production credit is on the §6418 list^[2].

What is Form 7218?

The IRS form for claiming the clean fuel production credit^[5].

Market price

About $0.85 to $0.93 in 2026, reflecting emissions-score and producer risk; Crux reported a 2025 average of $0.908.^{[Cenet Capital][Crux]}

Market estimate, not an offer. Prices move with buyer demand, deal size, seller credit quality, insurance and foreign-entity exposure. Run your own figures in the Credit Value Estimator, or compare every published report on the prices page.

Deadlines for §45Z

1. 4 Jul 2025
   No transfers of these credits to a specified foreign entity

   For tax years beginning after 4 July 2025, credits under §§45Q, 45U, 45X, 45Y, 45Z and 48E may not be transferred to a specified foreign entity.
2. 31 Dec 2025
   North American feedstock rule and end of the SAF premium

   For fuel produced after 31 December 2025, feedstock must be produced or grown in the U.S., Mexico or Canada, and sustainable aviation fuel no longer earns a higher rate.
3. 31 Dec 2029
   §45Z ends for fuel sold after this date

   No §45Z credit for transportation fuel sold after 31 December 2029.