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US issues 45Z tax guidance for low-carbon fuels

  • : Coal, Crude oil, Emissions, Natural gas, Oil products
  • 25/01/10

US producers of low-carbon fuels can start claiming the "45Z" tax credit providing up to $1/USG for road use and $1.75/USG for aviation, following the US Treasury Department's release today of proposed guidance for the credit.

The guidance includes proposed regulations and other tools to determine the eligibility of fuels for the 45Z tax credit, which was created by the Inflation Reduction Act to replace a suite of incentives for biofuels that expired at the end of last year. Biofuel producers have been clamoring for guidance from the US Treasury Department so they can start claiming the tax credit, which is available for fuels produced from 1 January 2025 through the end of 2027.

"This guidance will help put America on the cutting-edge of future innovation in aviation and renewable fuel while also lowering transportation costs for consumers," US deputy treasury secretary Wally Adeymo said. "Decarbonizing transportation and lowering costs is a win-win for America."

The creation of the 45Z tax credit has already prompted a change in US biofuels markets by shifting federal subsidies from blenders to producers. Because the value of tax credit increases for fuels with the lowest lifecycle greenhouse gas (GHG) emissions, it could encourage refiners to source more waste feedstocks such as used cooking oil, rather than conventional crop-based feedstocks.

While the guidance is still just a proposal, taxpayers are able to "immediately" use the guidance to claim the 45Z tax credit, until Treasury issues additional guidance, an administration official said.

The guidance on 45Z released today affirms that only the producer for the fuel is eligible to claim the credit, not blenders. To be eligible for the tax credit, the fuel must have a "practical or commercial fitness for use in a highway vehicle or aircraft" by itself or when blended into a mixture, Treasury said. Marine diesel and methanol suitable for highway or aircraft use are also eligible for 45Z, as is renewable natural gas that can be used as a transportation fuel.

Treasury also released an "annual emissions rate table" offering providers a methodology for determining the lifecycle GHG of fuel. Treasury said a key emissions model from the US Department of Energy, called 45ZCF-GREET, used to calculate the value of the 45Z tax credit is anticipated to be released today, although industry officials said it may be delayed until next week.

Treasury said it intends to propose regulations at "a future date" for calculating the GHG emissions benefits of "climate smart agriculture" practices for "cultivating domestic corn, soybeans, and sorghum as feedstocks" for fuel. Those regulations could lower the calculated lifecycle emissions of fuel from those crop-based feedstocks and increase the relative 45Z tax credit.

US biofuel producers said they are still awaiting key details on the 45Z tax credit, including the update to the GREET model. Among the outstanding questions is if the guidance released today provides "enough certainty to negotiate feedstock and fuel offtake agreements going forward", said the Clean Fuels America Alliance, an industry group that represents the biodiesel, renewable diesel and sustainable aviation fuel industries.

It is unclear how president-elect Donald Trump intends to approach this proposed approach for the 45Z credit, which will be subject to a 90-day public comment period. Trump has promised to "rescind all unspent funds" from the Inflation Reduction Act. But outright repealing 45Z would leave biofuels producers and farmers without a subsidy they say is needed to sustain growth, after the expiration last year of a $1/USG blender tax credit and a tax credit of up to $1.75/USG for sustainable aviation fuel. Biofuel and soybean groups were unsuccessful in a push last year to extend the expiring biofuel tax credits.

The 45Z credit is likely to be debated in Congress this year, as Republicans consider repealing parts of the Inflation Reduction Act. House Republicans have already asked for input on revisions to the 45Z credit, signaling they could modify the incentive. In a tightly divided Congress, farm-state lawmakers may hold enough leverage to ensure some type of biofuel incentive — and potentially one friendlier to agricultural producers than 45Z — survives.


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25/02/05

Equinor Norwegian gas output up on year in 2024

Equinor Norwegian gas output up on year in 2024

London, 5 February (Argus) — Norwegian state-controlled Equinor's gas output on the Norwegian continental shelf (NCS) edged up on the year, driven by record-high output from the giant Troll field and fewer unplanned outages at NCS assets, the firm said on Wednesday. The firm's Norwegian gas output rose by 4pc on the year to 758,000 b/d of oil equivalent (boe/d) or 107mn m³/d in 2024. This was driven by "strong contributions" from the Troll and Johan Sverdrup fields, Equinor said. Gas production from Troll — in which Equinor holds a 31pc stake — reached an all-time high last year at roughly 116mn m³/d, the Norwegian producer has said. And there were fewer "unplanned losses" on the NCS last year than in 2023, Equinor said. The firm was the largest producer on the NCS in 2023, accounting for more than a third of total gas output on the shelf, the latest available data from the Norwegian Offshore Directorate show. Equinor's global gas output rose by 2pc to 985,000 boe/d or 139mn m³/d last year. But the firm's combined oil and gas global output was slightly lower in 2024, with a small increase in gas production insufficient to offset lower liquids output. Equinor's equity liquids production was 1.08mn boe/d in 2024, down by 3pc on the year. Equinor expects "more than 10pc growth from 2024-27" in oil and gas production, reaching a peak at 2.3mn boe/d in 2027. And the firm estimated that hydrocarbons output would grow by 4pc from 2024 to 2025. Equinor's reported Norwegian gas prices dropped by 22pc on the year to $9.47/mn Btu, or €31.01/MWh, in 2024, using Wednesday's exchange rate. And the average reported price for its US gas decreased by 4pc to $1.70/mn Btu, or €5.57/MWh. Equinor made a profit of $8.83bn in 2024, down by 26pc on the year. Profit was $1.99bn in the fourth quarter, 23pc lower on the year. The company has cut its 2030 expected renewables capacity to 10-12GW, from 12-16GW, noting that the pace of the energy transition is slower in some markets. It did not give a new target for capital expenditure allocation to this sector. Equinor also modified some net carbon intensity goals, setting ranges rather than absolute targets. By Georgia Gratton and Jana Cervinkova Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

IMO mulls higher biofuel blend cargoes on Type I ships


25/02/05
25/02/05

IMO mulls higher biofuel blend cargoes on Type I ships

Singapore, 5 February (Argus) — The International Maritime Organization (IMO) is reviewing a proposal on the delivery of biofuel blends of up to 30pc on Type I barges, and is expected to approve this soon, according to several key maritime assessors and classification societies. The proposal, once approved by IMO, is expected to increase B30 bunkering globally as it would allow for the sale of B30 using the current available fleet of IMO Type I oil barges at any port, likely leading to a higher uptake of biofuel blends. B30 is a blend of 70pc very low-sulphur fuel oil (VLSFO) or high-sulphur fuel oil (HSFO) with 30pc used cooking oil methyl ester (Ucome). The draft circular on the carriage of blends of biofuels and MARPOL Annex I cargoes by conventional bunker ships was accepted by IMO's sub-committee on pollution prevention and response (PPR) during its 12th session from 27-31 January. The draft is expected to be approved at the next Marine Environment Protection Committee (MEPC) 83 meeting to be held from 7-11 April. Details of the 12th PPR meeting had not been published on IMO's website at the time of writing. The International Convention for the Prevention of Pollution from Ships (MARPOL) is an agreement that covers the prevention of pollution of the marine environment by ships. Annex I covers pollution by oil and oil products carried or operationally used by ships. Type I ships that deliver conventional bunker fuels can currently carry up to 25pc of biofuels under MARPOL Annex I, which has resulted in the adoption of the B24 blend in key ports across Asia, the Middle East and the Mediterranean region in the past few years. B24 consists of 24pc Ucome blended with 76pc fuel oil, which could be either VLSFO or HSFO. IMO has previously stated that Type II chemical tankers should be used for transporting biofuel blends with concentrations higher than 25pc. Shipowners have hence been waiting for the delivery of more Type II tankers, which are currently in limited supply at many ports. Market participants at the key port of Singapore are awaiting the impact of the decision in April. Enquiries for B30 have been surfacing in the past couple of months and refiners, traders, and shipowners are waiting for the outcome from MEPC 83, as well as subsequent decisions by the Maritime and Port Authority (MPA) of Singapore on how this will be implemented in the country, said several Singapore-based market participants. "[We] need to see if MPA agrees to follow IMO," said a key Singapore-based trader. MPA has not responded to a request for comment. The current push for higher biofuel blends comes as shipowners prepare to meet stricter compliance requirements set by IMO's Carbon Intensity Index and EU-led Emissions Trading Scheme and FuelEU Maritime. Demand for alternative marine fuels, especially biofuel blends and LNG, is expected to rise as shipowners look at reducing greenhouse gas (GHG) emissions across their fleets. By Mahua Chakravarty Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Equinor scales back renewables plan


25/02/05
25/02/05

Equinor scales back renewables plan

London, 5 February (Argus) — Norwegian state-controlled Equinor said today it has cut by up to 25pc its target for renewables capacity by 2030, and abandoned a plan to allocate half its capital expenditure (capex) to low carbon projects by that same year. The company has cut its 2030 expected renewables capacity to 10-12GW, from 12-16GW, noting that the pace of the energy transition is slower in some markets. It did not give a new target for capex allocation to this sector. Equinor also modified some net carbon intensity goals, setting ranges rather than absolute targets. It now plans to reduce net carbon intensity — which includes scope 3 emissions, from sold products — by 15-20pc by 2030 and by 30-40pc by 2035, from a 2019 baseline. The previous targets were at the higher end of these ranges. Equinor made a profit of $8.83bn in 2024, down by 26pc on the year. Profit was $1.99bn in the fourth quarter, lower on the year by 23pc. The company's oil and gas output was slightly lower in 2024, with a small increase in gas production not quite offsetting lower liquids output. Equinor's equity liquids production was 1.08mn b/d of oil equivalent (boe/d) in 2024, down by 3pc on the year, and its equity gas production rose by 2pc to 985,000 boe/d over the same timeframe. It expects "more than 10pc growth from 2024-27" in oil and gas production, and estimated that hydrocarbons output would grow by 4pc from 2024 to 2025. Liquids and gas prices fell in 2024. Equinor's reported Norwegian and US gas prices rose by 5pc and 26pc, respectively, on the year in the October-December period, but this was not enough to assuage a decrease across the year. The average reported price for its Norwegian gas dropped by 22pc on the year to $9.47/mn Btu in 2024, and the average reported price for its US gas decreased by 4pc to $1.70/mn Btu. Equinor reported an average liquids price of $74.1/bl in 2024, 1pc lower on the year. Its reported fourth-quarter 2024 liquids price fell by 10pc from the same period in 2023, to $68.5/bl. Equinor's power generation rose in 2024, boosted by additions in Brazil and Poland in 2023 and the start of the 531MW Mendubim solar plant in Brazil in 2024. Equinor's share of power generation stood at 4,917GWh in 2024, up by 19pc on the year — but its renewables share rose faster, by 51pc to 2,935GWh. Equinor has maintained its target of 30mn-50mn t/yr of CO2 storage by 2035. Equinor trimmed 600,000 t/CO2 equivalent (CO2e) from its absolute scope 1 and 2 — or operational — emissions over 2023-4. Scope 1 and 2 emissions from its operated production stood at 11mn t/CO2e in 2024. The company's upstream carbon intensity fell to 6.2kg CO2/boe in 2024, down by 7.5pc on the year. Equinor will buy back $5bn of shares in 2025, having bought $6bn in 2024. It completed the fourth $1.6bn tranche of its 2024 programme on 14 January and will launch the first tranche — of up to $1.2bn — of its 2025 programme on 6 February. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump proposes US take control of Gaza


25/02/05
25/02/05

Trump proposes US take control of Gaza

Washington, 4 February (Argus) — US president Donald Trump on Tuesday called for the US to take over Gaza, relocate the population of more than 2mn to other countries and then redevelop the enclave. Meeting with Israeli prime minister Benjamin Netanyahu at the White House, the one-time real estate developer sketched out a plan in which the US would "own" Gaza, level what has become a "demolition site" and remake the territory into the "Riviera of the Middle East". Assuming such a role would embroil the US far more deeply in what has been the deadliest conflict in the region in decades. Asked whether US troops would be involved in his plan, Trump said: "If it's necessary, we'll do that." Trump did not say where, exactly, the Palestinians from Gaza would be relocated, although he said he had a "feeling, despite them saying no" that Jordan's King Abdullah and Egyptian president Abdel Fattah el-Sisi "will open their hearts and will give us the kind of land we need to get this done". Trump said the only reason people want to return to their homes in Gaza is because they believe they have no alternative. Instead, they could be relocated and "live in comfort and peace". And after the rebuilding is completed, people from "all over the world" would live in the new Gaza — "Palestinians also," Trump said. Netanyahu praised Trump for his "willingness to puncture conventional thinking" and to propose ideas that could reshape the Middle East. "You cut to the chase," Netanyahu told Trump during the press conference. "You see things others refuse to see. You say things others refuse to say. And after their jaws drop, people scratch their heads. And they say, ‘You know. He's right.'" But Saudi Arabia's foreign ministry, in an apparent reaction to Trump's proposal, Tuesday argued the international community has a responsibility to alleviate the suffering of the Palestinian people "who will remain steadfast on their land and will not move from it". By David Ivanovich Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexican peso volatility persists despite tariff delay


25/02/04
25/02/04

Mexican peso volatility persists despite tariff delay

Mexico City, 4 February (Argus) — The Mexican peso remains volatile despite a bump from the last-minute deal postponing US President Donald Trump's threatened 25pc tariffs on Mexican imports, financial analysts said. The US agreed Monday to delay the tariffs for one month after discussions between Trump and Mexican President Claudia Sheinbaum. In return, Mexico pledged to deploy 10,000 National Guard troops to its northern border to combat drug trafficking, with a focus on fentanyl. The peso initially reacted positively to the news, strengthening by nearly 3pc late Monday after the agreement was announced. Still, today the Mexican peso weakened 0.4pc to Ps20.5 to the dollar by the end of trading, according to data from Mexico's Central Bank (Banxico). The peso has depreciated 16.6pc against the dollar from a year ago, according to Banxico data. The currency will remain volatile until there is greater clarity on whether tariffs will ultimately be imposed and at what level, BBVA Mexico bank analysts said in a note. If the US proceeds with a 25pc tariff, the peso could weaken to Ps24/$1, pushing Mexico's economy into a 1.5pc contraction this year, according to the bank. A lower 10pc tariff would be more manageable, BBVA Mexico added, as peso depreciation would offset some cost increases for US importers. In that scenario, Mexico's economy could still grow by 1pc in 2025. "Markets have debated whether to take Trump's policy promises seriously but not literally, or both seriously and literally," Barclays analysts wrote in a note to investors. Barclays also noted that the US sees itself as having the upper hand in any trade war, as a far greater share of Canadian and Mexican exports depend on US demand than vice versa. Mexico's state-owned oil company Pemex typically benefits from peso depreciation because of its US dollar-denominated crude exports, which help offset higher fuel import costs. "Pemex's revenues are tied to international oil prices, providing a natural hedge," the company said in its latest earnings report. However, analysts warned that Pemex's shift toward domestic refining over exports could reduce this buffer, leaving the company more vulnerable to foreign exchange swings, particularly as it carries a large dollar-denominated debt load. By Édgar Sígler Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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