Sec. 70521. Extension and modification of clean fuel production credit
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Section 45Z(f)(1)(A) is amended— in clause (i)(II)(bb), by striking and at the end, in clause (ii), by striking the period at the end and inserting , and , and by adding at the end the following new clause: such fuel is exclusively derived from a feedstock which was produced or grown in the United States, Mexico, or Canada. . The amendments made by this subsection shall apply to transportation fuel produced after December 31, 2025. Section 45Z(b)(1) is amended— by striking subparagraph
(C)and inserting the following: The Secretary may round the emissions rates under subparagraph
(B)to the nearest multiple of 5 kilograms of CO2e per mmBTU. , and by adding at the end the following new subparagraph: For purposes of this section, the emissions rate for a transportation fuel may not be less than zero. . The amendments made by this subsection shall apply to emissions rates published for transportation fuel produced after December 31, 2025. Section 45Z(b)(1)(B) is amended by adding at the end the following new clauses: Notwithstanding clauses (i), (ii), and (iii), the emissions rate shall be adjusted as necessary to exclude any emissions attributed to indirect land use change. Any such adjustment shall be based on regulations or methodologies determined by the Secretary. With respect to any transportation fuel which is derived from animal manure, the Secretary— shall provide a distinct emissions rate with respect to such fuel based on the specific animal manure feedstock, which may include dairy manure, swine manure, poultry manure, or any other sources as are determined appropriate by the Secretary, and notwithstanding subparagraph (E), may provide an emissions rate that is less than zero. . Section 45Z(b)(1)(B)(i) is amended by striking clauses
(ii)and
(iii)and inserting clauses (ii), (iii), (iv), and
(v). The amendments made by this subsection shall apply to emissions rates published for transportation fuel produced after December 31, 2025. Section 45Z(g) is amended by striking December 31, 2027 and inserting December 31, 2029 . Section 45Z(d)(5) is amended— in subparagraph (A)— in clause (ii), by striking and at the end, in clause (iii), by striking the period at the end and inserting , and , and by adding at the end the following new clause: is not produced from a fuel for which a credit under this section is allowable. , and by adding at the end the following new subparagraph: The Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of subparagraph (A)(iv). . Section 45Z(f)(3) is amended by adding at the end the following: The Secretary may prescribe additional related person rules similar to the rule described in the preceding sentence for entities which are not described in such sentence, including rules for related persons with respect to which the taxpayer has reason to believe will sell fuel to an unrelated person in a manner described in subsection (a)(4). . Section 6426(k) is amended by adding at the end the following new paragraph: With respect to any gallon of sustainable aviation fuel in a qualified mixture, this subsection shall not apply to any such gallon for which a credit under section 45Z is allowable (as determined without regard to subsection (a)(1)(A) of such section). . The amendment made by this paragraph shall apply to— fuel sold or used on or after the date of the enactment of this Act, and fuel sold or used before the date of enactment of this Act, but only to the extent that claims for the credit under section 6426(k) of the Internal Revenue Code of 1986 with respect to such sale or use have not been paid or allowed as of such date. Paragraph
(3)of section 45Z(a) is amended to read as follows: For purposes of this section, the term sustainable aviation fuel means liquid fuel, the portion of which is not kerosene, which is sold for use in an aircraft and which— meets the requirements of— ASTM International Standard D7566, or the Fischer Tropsch provisions of ASTM International Standard D1655, Annex A1, and is not derived from palm fatty acid distillates or petroleum. . Section 45Z(c)(1) is amended by striking , the $1.00 amount in subsection (a)(2)(B), the 35 cent amount in subsection (a)(3)(A)(i), and the $1.75 amount in subsection (a)(3)(A)(ii) and inserting and the $1.00 amount in subsection (a)(2)(B) . The amendments made by this paragraph shall apply to fuel produced after December 31, 2025. Section 6426(k), as amended by the preceding provisions of this Act, is amended by adding at the end the following new paragraph: This subsection shall not apply to any sale or use for any period after September 30, 2025. . Section 13704(b)(5) of Public Law 117–169 is amended by striking after and inserting section 6426(k)(3)), after . section 40B), The amendment made by this subsection shall apply to transportation fuel produced after December 31, 2024. Section 40A is amended— in subsection (b)(4)— in subparagraph (A), by striking 10 cents and inserting 20 cents , in subparagraph (B), by inserting in a manner which complies with the requirements under section 45Z(f)(1)(A)(iii) after produced by an eligible small agri-biodiesel producer , and by adding at the end the following new subparagraph: The credit determined under this paragraph with respect to any gallon of fuel shall be in addition to any credit determined under section 45Z with respect to such gallon of fuel. , and in subsection (g), by inserting (or, in the case of the small agri-biodiesel producer credit, any sale or use after December 31, 2026) after December 31, 2024 . Section 6418(f)(1)(A) is amended by adding at the end the following new clause: So much of the biodiesel fuels credit determined under section 40A which consists of the small agri-biodiesel producer credit determined under subsection (b)(4) of such section. . The amendments made by this subsection shall apply to fuel sold or used after June 30, 2025. Section 45Z(f) is amended by adding at the end the following new paragraph: No credit shall be determined under subsection
(a)for any taxable year beginning after the date of enactment of this paragraph if the taxpayer is a specified foreign entity (as defined in section 7701(a)(51)(B)). No credit shall be determined under subsection
(a)for any taxable year beginning after the date which is 2 years after the date of enactment of this paragraph if the taxpayer is a foreign-influenced entity (as defined in section 7701(a)(51)(D), without regard to clause (i)(II) thereof). . The amendment made by this subsection shall apply to taxable years beginning after the date of enactment of this Act.
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Sec. 70521
Extension and modification of clean fuel production credit
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