On Tuesday, February 3, we received the long‑awaited Notice of Proposed Rulemaking for the 45Z Clean Fuel Production Credit from the Department of Treasury. In response, Continuum hosted an emergency press conference to break down what this 170‑page document means for farmers, biofuel producers, and agriculture.
Our CEO and 7th-generation farmer, Mitchell Hora, shared his first‑pass analysis and answered questions from attendees. While there is still work to be done, this release marks a major step forward.
Here are the most important takeaways Mitchell highlighted in the press conference on Tuesday, February 3rd:
1. Farmers Are Officially “In”
This is the headline.
The rule confirms that feedstock carbon intensity (CI) will be included in 45Z. That means farmers and their practices matter.
This was not guaranteed, and it represents a major win for agriculture. Just weeks ago, Mitchell advocated directly to the White House Office of Management and Budget on two core points:
- Farmers must be included via feedstock CI
- Farmers must have a workable path to participate
With this rule, the IRS confirms that feedstock CI will be factored in and explicitly points to USDA’s technical guidelines as the framework.
We do not yet have the updated USDA rule, but we now know it is coming, and that farmer data will play a role.
2. This Is the Full 45Z Rule (Not Skinny Guidance) and now open to comment
The IRS released a comprehensive 170‑page proposed rule that consolidates and clarifies years of prior guidance from the Inflation Reduction Act, the “One Big Beautiful Bill,” and other interim notices. The rule:
- Clarifies which fuels and producers qualify
- Defines what constitutes a qualified sale
- Lays out how producers register and participate
- Explains emissions calculations and how CI translates into tax credit value
In short, this document sets the foundation for 45Z going forward.
A public comment period is opening now, with a public hearing scheduled for May 28. While changes are still possible, major shifts between proposed and final rules are typically limited.
3. USDA Details Are Still the Missing Piece
While farmers are in, the IRS delegated the operational details to the USDA.
The USDA FD-CIC, which will be used to calculate CI scores initially, has not yet been officially released but is expected to provide clarity on:
- How CI Scores are calculated (the final model)
- Which practices impact scores (rates, biologicals, cover crops, tillage, nutrient management, etc.)
- Recordkeeping requirements
- Verification and audit protocols
- Accounting method (Mass balance vs. book‑and‑claim)
The IRS rule explicitly defers to USDA for these technical guidelines and references the preliminary framework USDA released about a year ago; updated guidance is expected but not yet published.
Until that happens, money will not start flowing. But we now know it will.
4. A New 45Z Feedstock CI Calculator Is Coming
Another major update: 45Z will not rely solely on existing calculators.
Instead, the IRS announced the creation of a new, program‑specific calculator called the “45Z CF FD-CIC.”
What we know so far:
- It will be based on the USDA’s framework (USDA FD-CIC)
- It will integrate ongoing research from DOE’s GREET model
- It is designed specifically for 45Z
- It will include practices like cover crops, reduced tillage, and improved nutrient management, however the impacts of these practices are not yet clear.
This signals collaboration between USDA and DOE and gives clarity that 45Z will have its own standardized tool.
5. Audits and Verification Are Central—and ISO 14065 Is Confirmed
Verification is not optional.
The IRS rule confirms that biofuel producers must undergo third‑party verification, with pathways including:
- ISO‑based audits (ISO 14065)
- CARB‑approved verification options
USDA’s prior guidance also referenced ISO 14065, the global standard for greenhouse gas verification. This aligns directly with the infrastructure Continuum Ag has already built and deployed at scale.
For farmers, this reinforces the importance of:
- Good records (showing what happened on each acre)
- Practice documentation (proving what happened using receipts, pictures, field maps…)
- Audit‑ready data
6. Mass Balance vs. Book‑and‑Claim Remains Unresolved
One of the most important open questions is how farmers connect to the biofuel supply chain.
- Mass balance requires physical delivery of grain into a participating biofuel supply chain
- Book‑and‑claim allows farmers to sell grain normally while separately selling verified CI attributes
The IRS rule does not address this. The answer will come from USDA.
Continuum Ag continues to advocate strongly for book‑and‑claim, which provides flexibility, minimizes market disruption, and allows broader farmer participation.
7. 2025 (and Possibly 2024) Data Could Matter
The rule states that the new feedstock calculator will apply to fuel produced in 2025.
That raises an important possibility: practices and data from 2024 crops may be relevant, depending on final details.
At a minimum, this confirms that:
- 2025 data matters
- 2026 planning should already be underway
- Fall‑applied fertilizer, cover crops, and spring practices must be documented
This moves CI data from a “nice to have” to something that looks increasingly required.
8. Manure‑Derived Fuels Are a Big Winner
One clear standout in the rule is fuel produced directly from animal manures (e.g., via digesters).
These fuels can achieve negative CI scores, unlocking very large credit values under 45Z.
This is different from simply applying manure to crops—which lowers crop CI but still bottoms out at zero for ethanol. Manure‑derived fuels themselves can go below zero.
9. SAF Still Faces Headwinds
Sustainable Aviation Fuel (SAF) remains part of the rule, but uncertainty persists.
While there is an opportunity, SAF continues to face structural and economic challenges under current guidance. Ethanol and biodiesel pathways appear clearer at this stage.
This rule does not flip the switch on payments today—but it does confirm something just as important: farmers will provide critical value when payments do occur.
The IRS rule:
- Confirms farmers have a role in 45Z
- Establishes the framework for feedstock carbon intensity
- Signals that verified farm data will matter
- Reinforces the need for records, audits, and infrastructure
The path forward now runs through USDA. When that guidance is released, the industry will be ready to move.
In the meantime, the message is clear: get your data organized.
At Continuum Ag®, we built TopSoil® specifically for this moment—to help farmers document practices, verify data, understand their CI score, and be ready when opportunity opens. We’ll continue to break down new guidance as it’s released and keep farmers informed every step of the way.
More clarity is coming. And when it does, those who prepare early will be positioned to win.
Ways to Be Prepared Today
- Get your CI Score for free at TopSoil.ag
- Talk with a Sales Agronomist at 855.805.5700 or email sales@continuum.ag
- Tune into CI Chit Chat every Tuesday at 7:45 a.m. CST, get registered here: https://share.hsforms.com/1N7hYWyOPQBieuXl1p2gu1Qci92n