Transition relief now covers two of 45Z's five production years

A model the producer does not control decides the size of a 45Z credit. The amount turns on the fuel's lifecycle greenhouse gas emissions rate, and lower rates pay more ^[2]. That rate comes out of the Energy Department's 45ZCF-GREET model, which the revamped credit requires to be updated ^[3]. The IRS says DOE is developing those updates ^[5].

So the operative content of Notice 2026-53 is the relief. It sets a safe harbor available for 2025 clean fuel production ^[6]. It also sets transition rules for applying the One Big Beautiful Bill Act's changes where an allowed methodology has not yet been updated, used cooking oil among them ^[7]. Transition relief also reaches fuel produced in 2026 from certain requirements ^[8]. For agricultural feedstocks, the guidance would let taxpayers account for qualifying low-carbon practices consistent with USDA technical guidelines and the 45Z-specific Feedstock Carbon Intensity Calculator ^[22].

The credit reaches fuel produced domestically after December 31, 2024 and sold by December 31, 2029 ^[9], which is five production years, 2025 through 2029 ^[1]. Relief covers two of them, so 40 percent of the production years the statute allows will be computed on interim methods ^[2].

Manure is the exception Congress wrote in. The law prohibits negative emissions rates for everything except transportation fuel derived from animal manure ^[13], and requires distinct rates for specific manure feedstocks ^[14]. DOE has yet to publish those separate rates, and because lower rates pay larger credits, that feedstock carries the biggest per-unit credits available under the statute ^[3].

Frank Bisignano, the IRS CEO, said the guidance "helps unlock billions of dollars for America's agricultural producers, provides greater certainty for investment across rural America, strengthens domestic biofuel production, and helps lower fuel costs for American consumers" ^[19]. His claim of certainty is the case against reading this file as unfinished. A method the IRS has said it will accept is something a lender can underwrite while the model behind it is provisional. Producers of ethanol, renewable diesel, sustainable aviation fuel and renewable natural gas ^[21] now choose on 2025 filings between the safe harbor and waiting for the February proposed regulations. Those regulations have been under final consideration at the IRS and Treasury for roughly seven months ^[15][4].

Two requirements hold regardless of the model. Feedstock must be grown or produced in the United States, Mexico or Canada ^[12], and emissions attributable to indirect land use change are excluded from the rate ^[11]. Registration is the third pass-fail test: a claimant must have held a Form 637 registration at the time of production ^[10].

What would show this reading wrong is a fast finish. If DOE ships the manure updates to 45ZCF-GREET and Treasury finalizes the regulations before returns are filed, 2026 fuel gets priced on final numbers and the transition rules become a footnote. The USDA finalized its regenerative-practice rules in June, and the IRS took about three months to say how they enter the model ^[17][4][5].