Iowa Biodiesel Board Submits Comments on 45Z Clean Fuel Production Credit Proposed Rule

(ANKENY, Iowa) – The Iowa Biodiesel Board today submitted formal comments on the proposed rulemaking for the Section 45Z Clean Fuel Production Credit, urging the Department of Treasury to finalize the rule with targeted clarifications to make the credit workable for Iowa's biodiesel producers and farmers.

"The proposed rule is a meaningful step forward, and we commend Treasury for responding to taxpayer comments and providing much-needed market certainty," said IBB Executive Director Grant Kimberley. "While the rule thoughtfully addresses a number of key questions, we are asking for additional clarity in several areas that are critical to Iowa biodiesel producers and the farmers who supply them."

Iowa is the nation's leading biodiesel-producing state, with eight operating plants that produced an estimated 266 million gallons in 2025. The industry contributes nearly $1.5 billion in output to the Iowa economy annually and supports more than 1,198 jobs across the state, according to a study by Design Innovation Solutions.

IBB's comments included the following four priority areas:

Prevailing Wage Requirements: IBB called on Treasury to establish clearer, more workable prevailing wage standards. The current framework is complex and costly for member facilities to navigate. The comments request several clarifications to make compliance more practical and equitable for biodiesel producers.

Greenhouse Gas Modeling: IBB urged Treasury to promptly update and publish the 45ZCF-GREET model to incorporate the USDA Feedstock Carbon Intensity Calculator upon its finalization, and to apply it retroactively to fuel produced and sold in 2025. The comments emphasized that farmers must have maximum flexibility to implement the agricultural practices best suited to their individual operations without facing unnecessary administrative barriers.

Safe Harbor and Recordkeeping: IBB requested that the final rule include a retroactive safe harbor provision for qualified sales made prior to the proposed rule's publication, and that Treasury adopt a once-a-year certification covering a full calendar year to prevent inadvertent compliance gaps.

Credit Eligibility and Flexibility: IBB asked Treasury to confirm that 45Z credit eligibility is determined at the time of production based on suitability for use as transportation fuel, regardless of end use — a critical protection for producers serving industrial customers. The comments also requested clarification on pro rata allocation rules, tolling arrangements, feedstock definitions and the definition of a qualified facility.

"Iowa's biodiesel industry — from the farmers who grow the feedstocks to the producers who refine them into clean-burning fuel — stands ready to deliver on the promise of American energy independence and agricultural strength that this credit is designed to support," Kimberley said. "We are simply asking Treasury to make it work as intended, for the producers and farmers who depend on it most."

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Jenna Rose, IBB