IRS 45Z Tax Credit Notice 2026-53 and GREET Model Update: Key Changes for Clean Fuel Producers

The IRS has issued Notice 2026-53, updating the emissions rate table for the Section 45Z clean fuel production credit. The notice implements changes required by the One Big Beautiful Bill Act, including excluding indirect land use change emissions, limiting foreign feedstocks to the U.S., Canada, and Mexico, and capping negative emissions rates except for manure-derived fuels. It also adds distinct pathways for dairy and swine manure and incorporates the USDA's carbon intensity framework for crops. The DOE's September 2026 version of the 45ZCF-GREET model integrates these updates, adding new manure pathways, separating behind-the-meter electricity inputs, and including carbon capture parameters for certain feedstocks. Producers using imported used cooking oil outside North America face eligibility changes, while those using regenerative agriculture practices get a safe harbor on nutrient budget requirements for 2025 and 2026 production. Poultry and beef manure pathways are expected later in 2026.