Clean fuel credit not on Treasury priority list

: Agriculture, Battery materials, Biofuels, Emissions, Hydrogen
24/10/01

The US Department of Treasury says it will prioritize issuing final guidance around qualifying for a handful of Inflation Reduction Act clean energy tax credits before the end of President Joe Biden's administration, though guidance around a new credit for low-carbon fuels will likely take longer.

The agency's new timeline suggests that granular rules around how to qualify for the 2022 climate law's clean fuels incentive will ultimately be decided by the winner of this year's presidential election. Kicking off in January and lasting through 2027, the 45Z tax credit will replace a suite of expiring fuel-specific credits and offer up to $1/USG for low-carbon road fuels and up to $1.75/USG for low-carbon aviation fuels.

Treasury is still "actively" working on guidance around the 45Z incentive, Treasury acting assistant secretary for tax policy Aviva Aron-Dine told reporters today. But unlike for other credits, officials have not provided any timeline for proposing or finalizing that guidance or any signal of whether they could issue any safe harbor assurances before final guidance is available.

The Biden administration has not yet clarified how it will calculate greenhouse gas emissions or account for the benefits of "climate-smart" agricultural practices for fuels derived from crop feedstocks, potentially deterring investments until final guidance is available. The 45Z credit requires fuel to meet an initial carbon intensity threshold and then increases the subsidy as a fuel's greenhouse gas emissions fall.

Policy clarity is essential, biofuel groups say, since fuel and feedstock offtake contracts are hashed out months in advance and the credit is relatively short-lived compared to other Inflation Reduction Act incentives. Some farm state lawmakers have also pushed for final guidance to bar refiners using foreign feedstocks — such as used cooking oil from China — from being able to claim the credit.

The Biden administration still expects to finalize guidance for the 45V clean hydrogen tax credit by year-end out of recognition that the industry "needs certainty" to invest, Aron-Dine said. The final guidance will provide "appropriate adjustments and additional flexibilities" to help projects move forward, she said, while adhering to requirements to consider indirect greenhouse gas emissions caused by the production of clean hydrogen.

Treasury also expects to issue final guidance by the end of the administration on the 45Y clean electricity production credit and clean electricity investment credit, a technology-neutral tax credit it proposed earlier this year. The final guidance will continue the "explosive growth" of wind and solar and also provide tax credits to emerging technologies that produce no net greenhouse gas emissions, Aron-Dine said.

Other tax credits set to be finalized by the end of the administration include the section 48 investment tax credit and the 45X advanced manufacturing production credit that is supporting the buildout of domestic supply chains, Aron-Dine said.

By Cole Martin and Chris Knight

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

25/04/17

Canada grants tariff relief to automakers

Pittsburgh, 17 April (Argus) — The Canadian government will allow automakers to circumvent retaliatory tariffs to continue importing US-assembled vehicles if the companies keep making cars in Canada. Canada began taxing imports of US-made vehicles and parts on 9 April at a 25pc rate in response to a similar tariff the US had implemented. Canada's tariff on vehicle imports from the US will not apply to car companies that keep their Canadian plants running, the country's finance minister said this week. The measure attempts to prevent closures of auto plants and layoffs in the Canadian automotive sector that the US tariffs threaten to cause. Automaker Stellantis paused production at its Windsor, Ontario, assembly plant in early April to evaluate the US tariff on vehicle imports. The plant will re-open on 22 April, Stellantis said. General Motors also plans to reduce production of its electric delivery fan at its Ingersoll, Ontario plant. The slowdown will result in layoffs of 500 workers, the Unifor union said. The automotive industry in the US, Canada and Mexico has struggled to adapt its supply chains to the new tariffs because the US, Canada Mexico free trade agreement (USMCA) and its predecessor helped establish an interconnected North American auto sector. In another measure, companies in Canada will get a six-month reprieve from tariffs on imports from the US used in manufacturing, food and beverage packaging. The six-month relief also applies to items Canada imports from the US used in the health care, public safety and national security sectors. "We're giving Canadian companies and entities more time to adjust their supply chains and become less dependent on US suppliers," finance minister Francois-Philippe Champagne said in a statement. By James Marshall Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

IMF anticipates lower growth from US tariffs

25/04/17

IMF anticipates lower growth from US tariffs

Washington, 17 April (Argus) — Economic growth projections set for release next week will include "notable markdowns" caused by higher US tariffs that have been disrupting trade and stressing financial markets, IMF managing director Kristalina Georgieva said today. The IMF earlier this month warned that the tariffs that President Donald Trump was placing on trading partners could pose a "significant risk" to the global economy. Those higher trade barriers are on track to reduce growth, raise prices for consumers and create incremental costs related to uncertainty, the IMF plans to say in its World Economic Outlook on 22 April. "Our new growth projections will include notable markdowns, but not recession," Georgieva said Thursday in a speech previewing the outlook. "We will also see markups to the inflation forecasts for some countries." Trump has already placed an across-the-board 10pc tariff on most trading partners, with higher tariffs on some goods from Canada and Mexico, a 145pc tariff on China, and an exception for most energy imports. Those tariffs — combined with Trump's on-again, off-again threats to impose far higher tariffs — have been fueling uncertainty for businesses and trading partners. The recent tariff "increases, pauses, escalations and exemption" will likely have significant consequences for the global economy, Georgieva said, resulting in a postponement of investment decisions, ships at sea not knowing where to sail, precautionary savings and more volatile financial markets. Higher tariffs will cause an upfront hit to economic growth, she said, and could cause a shift in trade under which some sectors could be "flooded by cheap imports" while other sectors face shortages. The IMF has yet to release its latest growth projections. But in January, IMF expected global growth would hold steady at 3.3pc this year with lower inflation. The IMF at the time had forecast the US economy would grow by 2.7pc, with 1pc growth in Europe and 4.5pc growth in China. The upcoming markdown in growth projections from the IMF aligns with analyses from many banks and economists. US Federal Reserve chair Jerome Powell on 16 April said the recent increase in tariffs were likely to contribute to "higher inflation and slower growth". Those comments appear to have infuriated Trump, who has wanted Powell to cut interest rates in hopes of stimulating growth in the US. "Powell's termination cannot come fast enough!" Trump wrote today on social media. Powell's term as chair does not end until May 2026. Under a longstanding US Supreme Court case called Humphrey's Executor , Trump does not have the authority to unilaterally fire commissioners at independent agencies such as the Federal Reserve. Trump has already done so at other agencies such as the US Federal Trade Commission, creating a potential avenue to overturn the decision. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Risks rising for possible recession in Mexico: Analysts

25/04/17

Risks rising for possible recession in Mexico: Analysts

Mexico City, 17 April (Argus) — The Mexican finance executive association (IMEF) lowered its 2025 GDP growth forecast for a second consecutive month in its April survey, citing a rising risk of recession on US-Mexico trade tensions. In its April survey, growth expectations for 2025 fell to 0.2pc, down from 0.6pc in March and 1pc in February. Nine of the 43 respondents projected negative growth — up from four in March, citing rising exposure to US tariffs that now affect "roughly half" of Mexico's exports. The group warned that the risk of recession will continue to rise until tariff negotiations are resolved, with the possibility of a US recession compounding the problem. As such, IMEF expects a contraction in the first quarter with high odds of continued negative growth in the second quarter — meeting one common definition of recession as two straight quarters of contraction. Mexico's economy decelerated in the fourth quarter of 2024 to an annualized rate of 0.5pc from 1.7pc the previous quarter, the slowest expansion since the first quarter of 2021, according to statistics agency data. Mexico's statistics agency Inegi will release its first estimate for first quarter GDP growth on April 30. "A recession is now very likely," said IMEF's director of economic studies Victor Herrera. "Some sectors, like construction, are already struggling — and it's just a matter of time before it spreads." The severity of the downturn will depend on how quickly trade tensions ease and whether the US-Mexico-Canada (USMCA) free trade agreement is successfully revised, Herrera added. But the outlook remains uncertain, with mixed signals this week — including a possible pause on auto tariffs and fresh warnings of new tariffs on key food exports like tomatoes. IMEF also trimmed its 2026 GDP forecast to 1.5pc from 1.6pc, citing persistent tariff uncertainty. Its 2025 formal job creation estimate dropped to 220,000 from 280,000 in March. The group slightly lowered its 2025 inflation forecast to 3.8pc from 3.9pc, noting current consumer price index should allow the central bank to continue the current rate cut cycle to lower its target interest rate to 8pc by year-end from 9pc. IMEF expects the peso to end the year at Ps20.90/$1, slightly stronger than the Ps21/$1 forecast in March. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Belgian H2 pipeline faces year delay in fruit dispute

25/04/17

Belgian H2 pipeline faces year delay in fruit dispute

London, 17 April (Argus) — The construction of Belgium's first hydrogen pipeline between the ports of Ghent and Antwerp could be delayed by a year, after its environmental permit was suspended, gas transport system operator Fluxys has said. The 35km pipeline linking the towns of Zelzate and Kallo — part of a "first phase" of Belgium's "open access" hydrogen pipeline network — was to be completed in 2026 following the start of construction last month . But Belgium's council for permit disputes suspended the environmental permit following appeals from fruit growers related to discharge of perfluoroalkyl and polyfluoroalkyl substances (PFAS) — sometimes referred to as "forever chemicals" — into the water, Fluxys said. "Work has been halted pending a decision on the merits of the case, which could take up to a year," said Fluxys spokesperson Tim De Vil. "This clearly puts our timetable at risk." A final decision is expected next year at the earliest. De Vil said Fluxys is talking to the Flemish government and farmers' organisations to ensure the permit can still be approved. Fluxys' permit included permission to dispose of PFAS-contaminated water into surface water under "certain conditions." But the regulatory body ruled the impact on areas already exceeding the PFAS limits had been evaluated inaccurately. By Alexandra Luca Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Japan’s Mitsui invests in US e-fuel producer

25/04/17

Japan’s Mitsui invests in US e-fuel producer

Tokyo, 17 April (Argus) — Japanese trading company Mitsui has invested in California-based synthetic fuel (e-fuel) producer Infinium, aiming to acquire knowledge on technology and commercialisation in the emerging sector. The investment in Infinium was conducted in March, Mitsui told Argus on 16 April, declining to disclose the specific amount. This marks Mitsui's second investment in e-fuel producers. The firm invested in California-based synthetic sustainable aviation fuel (e-SAF) producer Twelve Benefit . Infinium produces green hydrogen from water by electrolysis, and converts the hydrogen and CO2 into e-fuels by using renewable energy. The firm is planning to launch its second plant, which will specialise in e-SAF production. International Airlines Group (IAG) and American Airlines have agreed to receive the e-SAF that will be produced at the plant. E-fuels can help reduce over 90pc of greenhouse gas (GHG) emissions compared with conventional fossil fuels, and are notable as "drop-in" substitutes for conventional fuels, applicable to existing engines and infrastructures, Mitsui said. Mitsui is observing the e-SAF market. SAF is a relatively promising prospect in the renewable energy sector, on the back of the target by the UN's International Civil Aviation Organisation (ICAO) to achieve net-zero emissions in international aviation by 2050, as well as governmental policies bolstering the deployment of SAF, a representative of the firm told Argus . Japan plans to replace 10pc of the jet fuel consumed by domestic airlines with SAF in 2030. By Kohei Yamamoto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more