The 45Z clean fuel production credit (CFPC) in the US is set to come into effect on January 1, 2025. But the transition from the $1 per gallon blender’s tax credit (BTC) to the CFPC does not appear to be smooth, and might benefit the production margins on renewable diesel (RD) while the market adapts.
The BTC is a volumetric credit providing a $1per gallon credit for blending biodiesel, renewable diesel, or sustainable aviation fuel with petroleum diesel. The BTC will expire at the end of 2024.
The CFPC differs from the BTC, with the credit being earned by the producer rather than the blender. The CFPC is also available to any transportation fuel and is not limited to biofuels.
The CFPC can only be earned by US domestic producers. Imported biodiesel, RD and SAF do not qualify. But domestically producer fuel that is exported does qualify.
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