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45Z: Clean Fuel Production Credit

Federal Agency


Internal Revenue Service (IRS)


To provide a tax credit for domestic production of clean transportation fuels, including sustainable aviation fuels. Fuels with less than 50 kilograms of carbon dioxide equivalent per million British thermal units (CO2e per mmBTU) qualify as clean fuels eligible for credits.

Applicant and/or Project Eligibility Requirements

Producers must be registered in the United States to qualify.

Decarbonization Considerations

Fuels with less than 50 kilograms of CO2e per mmBTU qualify as clean fuels.

Equity Considerations

Credit is 5 times the base amount ($1/gallon for non-aviation fuel, $1.75 gallon for aviation fuel, multiplied by the emissions factor) for facilities meeting prevailing wage and registered apprenticeship requirements.

Helpful Tips

Tax-exempt entities can leverage these credits through a new mechanism known as "elective" or "direct" pay. To learn more about how these tax credits work for entities with and without tax liability, check out our Funding Guidance here:

Other Notes


Deadline (Announced or Anticipated)

Applicable to fuel produced after December 31, 2024 and used or sold before December 31, 2027

Funding Available

$0.20/gallon for non-aviation fuel and $0.35/gallon for aviation fuel, multiplied by the carbon dioxide “emissions factor” of the fuel. Inflation adjusted after 2024

Max Award Amount


Expected Allocations

Uncapped for 10 years

Average Award (Estimated)


Matching Funds


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