For most farmers, 45Z is not a payment. It is a tax credit that a clean fuel producer claims on qualifying fuel it produces and sells, and its size depends on how low that fuel’s lifecycle emissions rate is. A farmer sees any value only when the feedstock lowers that emissions score and when the buyer passes part of the benefit back under a written arrangement. The July 2025 interview with Continuum Ag CEO Mitchell Hora, published by Agriculture.com, described the law as it stood then. Official guidance issued since then has changed or clarified several of its points, and the production date of the fuel now decides which rules apply.
What the July 2025 article said
Noah Rohlfing’s article, published by Agriculture.com on July 14, 2025, reported on a virtual press conference in which Hora discussed how the 45Z changes made by the 2025 reconciliation law could affect farmers and fuel producers, and what they could do to prepare. Treat its claims as the view of one industry executive at that date, not as Internal Revenue Service (IRS) rules.
The extension and the SAF rate cut
The article said the credit was extended through 2029. It also described the enhanced rate for sustainable aviation fuel (SAF) as reduced from $1.75 per gallon to $1 per gallon, the same level as ethanol, biodiesel, and renewable diesel. Those two figures are the article’s reporting of the rate change. The later IRS treatment of SAF is covered below, because it depends on when the fuel was produced.
Hora on ethanol-to-SAF economics
The article’s central warning was that a lower SAF rate could weaken the economics of turning ethanol into SAF. Hora was quoted as saying:
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“That is really going to hinder the ability to take your ethanol and turn it into SAF,” Hora said.
“Under the current version of 45Z, the alcohol-to-jet pathway [is] not going to happen. Not at any type of real pace.”
Hora said, “the way that the rules are written doesn’t provide the financial incentive to produce SAF using ethanol.”
These are Hora’s forecasts about market behavior. They are not an IRS finding, and no official source reviewed for this update confirms that alcohol-to-jet production would or would not develop at any pace.
Book and claim versus mass balance
Hora was reported to think a book-and-claim approach could be better for farmers, while urging them to prepare for mass balance. In the article’s explanation, book and claim separates the environmental certificate from the physical crop sale. Mass balance keeps a low-carbon crop claim tied to the delivery of that crop to a biofuel producer. The article treated the choice between the two as open in July 2025. Section 4 explains how the later guidance handles chain of custody.
Farm data and carbon-intensity scores
The article stressed gathering farm data and knowing field-level carbon-intensity (CI) scores. Hora’s view, as reported, was that moving closer to zero on the CI score could improve the credit calculation and the chance of sharing financial value with farmers. That is a conditional point about how the calculation works. It is not a promised premium, and it does not mean every farmer or field would receive a direct payment.
What changed after 2025: the production date decides the rules
The most important correction to the July 2025 account is timing. The IRS describes 45Z as an income tax credit for qualifying clean transportation fuel produced domestically and sold from January 1, 2025 through December 31, 2029. The taxpayer must be registered as a clean fuel producer at the time of production, and the credit amount depends on the applicable amount and the fuel’s emissions factor. Form 7218 instructions state that the 2025 law moved the termination date from December 31, 2027 to December 31, 2029, restricted certain foreign feedstocks for fuel produced after December 31, 2025, and removed the special SAF rate for fuel produced after that date.
| Item | Fuel produced in 2025 | Fuel produced after December 31, 2025 |
|---|---|---|
| Special SAF rate | Enhanced rate, reported in the July 2025 article as $1.75 per gallon | Special rate removed. The article reports SAF at $1 per gallon, the same as ethanol, biodiesel, and renewable diesel |
| Feedstock origin | The post-2025 feedstock restriction does not apply to this fuel | Feedstocks must be produced or grown in the United States, Mexico, or Canada, according to the IRS overview. Form 7218 instructions also restrict certain foreign feedstocks |
| Low-carbon agricultural practices | The 2026 version of 45ZCF FD-CIC may be used if USDA technical-guideline requirements are met (Notice 2026-53) | The emissions-rate table in Notice 2026-53 applies to 2026 production |
| Nutrient-budget transition relief | Covered for 2025 production under Notice 2026-53, with nutrient applications still required to be substantiated | Covered for 2026 production under Notice 2026-53, with nutrient applications still required to be substantiated. The relief does not extend to later years |
Feedstock origin after December 31, 2025
For fuel produced after December 31, 2025, the feedstock must be produced or grown in the United States, Mexico, or Canada. Farmers who sell into supply chains that include imported feedstock should ask the buyer which origin rules apply to each lot, because the answer now depends on the production date.
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Notice 2026-53 explains statutory emissions-accounting amendments. These include excluding indirect land-use-change emissions from the calculation and setting distinct emissions rates for fuels made from animal manure. The notice does not give a single effective date for every amendment in the material reviewed for this update, so check the current notice text before relying on a specific rate for a specific production year.
How farm practices and records enter the calculation
The IRS says the credit generally increases as a fuel’s lifecycle emissions rate falls. Farm practices can therefore matter, but only if they are measured and documented under the methods the government has approved. Eligibility, the resulting score, and any farmer compensation depend on the specific facts, the applicable method, the program arrangement, and the taxpayer’s own circumstances.
Which model and table apply
Notice 2026-53 supplies the 2026 emissions-rate table and the transition guidance that goes with it. It says Treasury and the IRS anticipated that a 45Z-specific version of USDA’s Feedstock Carbon Intensity Calculator would be an input to the Department of Energy’s 45ZCF-GREET model. At the time of the notice, that 2026 module was described as forthcoming. Check DOE’s current model release to confirm whether it is available before using it to calculate a score.
Nutrient records and transition relief
For fuel produced in 2025, taxpayers may use the 2026 version of 45ZCF FD-CIC for low-carbon agricultural practices if they meet the USDA technical-guideline requirements, including chain-of-custody and audit or verification standards. For fuel produced in 2025 and 2026, the notice treats certain pre-application nutrient-budget requirements as satisfied, because crops were likely planted before final USDA guidelines were issued. That relief does not remove the need to substantiate the work. Operators must still document:
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- the nutrient applications made on each field;
- the measurable nutrient sources and removals entered into the calculator;
- the field or lot that the records connect to the delivered crop.
Chain of custody and audit
Chain-of-custody records connect a claimed low-carbon feedstock to the fuel that was produced from it. Audit or verification standards, under the USDA guidelines referenced in Notice 2026-53, govern how those records are checked. Farmers who want their practices counted should ask whether the buyer’s chain-of-custody system and verification process meet those standards before the crop is delivered, not after.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Where the rules stand in October 2026
The IRS published proposed regulations for Section 45Z in February 2026. They describe eligibility, emissions-rate methods, certification, and registration. They are proposed rules, not final regulations. In a September 8, 2026 IRS announcement, the agency said the proposed regulations were under final consideration. Until final regulations are issued, the proposed text describes the IRS’s current thinking, not a binding rule. Notice 2026-53 is the operative guidance on emissions rates and transition relief.
The July 2025 article’s treatment of book and claim and mass balance was written while those questions were open. The proposed regulations address certification and registration, which is where those questions now sit. Whether a particular arrangement qualifies depends on how the producer structures it and the rules in effect for the production date.
What the farmer-value claims do not establish
No official source reviewed for this update gives an estimate of what an individual farmer will earn or receive from 45Z. A per-bushel or per-farm figure would be a guess. The July 2025 article’s discussion of shared value was a forecast of how producers might respond, not a payment schedule. A farmer should not assume that a lower CI score will produce a premium, and should read any contract for how value is shared, when it is paid, and what happens if the credit changes.
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- Confirm the production date. Determine whether the fuel your crop goes into was produced in 2025, in 2026, or later, because the SAF rate, feedstock-origin rules, and transition relief all turn on that date.
- Ask whether the buyer is a registered clean fuel producer. The IRS says registration at the time of production is a condition of claiming the credit.
- Ask which calculator and table the buyer uses. Confirm whether the score relies on the 2026 FD-CIC version, the Notice 2026-53 table, or another method, and check DOE’s current model release.
- Ask about chain of custody and mass balance. Find out whether your delivery is tied to the low-carbon claim, and what records you must keep.
- Keep the nutrient and field records. Document applications, sources, and removals for each field before the crop is harvested, not reconstructed later.
- Get the value-sharing terms in writing. Any payment to a farmer should be spelled out in the contract.
- Check the tax treatment with a qualified tax professional. Individual eligibility and the correct filing treatment depend on facts that a general article cannot settle.
Continuum Ag, the company led by Hora, offers CI Score and CI Certification services and describes them as a way to navigate 45Z. That is a provider example, not an IRS endorsement, and it does not guarantee that any field or fuel will qualify.
Official references for current rules are the IRS 45Z guidance, Notice 2026-53, and the USDA and DOE calculation materials named above.
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