By Mitchell Hora
If there’s one thing we’ve learned over the last three and a half years, it’s this: 45Z is taking forever. It’s been a long, slow process, but we remain diligent and continue to be steadfast in the belief that the program will be a success and the associated ripple effect will fundamentally change global agriculture.
And while it has been a multi-year process, the reality is that enormous progress has been made, and some of the most important milestones are happening right now. It is our hope that 45Z will be well worth the wait!
That’s exactly why the theme of this year’s TopSoil Summit is “Built For This.”
We understand farmers, ethanol producers, and ag leaders who have spent years preparing, organizing data, improving practices, and understanding Carbon Intensity are the ones positioned to benefit as this program finally takes shape.
How We Got Here: The 45Z Timeline
August 2022: 45Z Becomes Law
The 45Z Clean Fuel Production Credit was created through the Inflation Reduction Act.
The goal was simple in theory: incentivize lower-carbon transportation fuels and reward the supply chain for reducing emissions.
Biofuels became a major part of that conversation, and for agriculture, it opened the door for farmers to potentially participate in value creation through lower Carbon Intensity feedstocks.
But while the law was passed in 2022, very little regulatory clarity followed for quite some time.
2022–2024: Mostly Waiting
From late 2022 through the end of 2024, there was very little meaningful regulatory progress.
A few smaller notices and discussions were released, but there still wasn’t enough clarity for the market — especially farmers — to confidently move forward.
The industry knew 45Z had massive potential, but nobody had a clear roadmap yet.
January 2025: USDA & DOE Enter the Conversation
In January 2025, the Treasury Department (IRS) released an intent-to-propose rule for 45Z.
Unfortunately, it still lacked many of the critical details needed to truly launch the program.
Shortly afterward:
- USDA released guidance regarding feedstock Carbon Intensity analysis and introduced their own Feedstock Carbon Intensity Calculator (FDCIC)
- DOE released a 45Z-specific GREET calculator that was named as THE CI calculator for biofuel producers pursuing tax credits
The challenge was that the USDA’s guidance did not clearly integrate with the Treasury’s rulemaking process. As a result, the USDA materials largely sat in limbo without certainty around how they would actually fit into 45Z implementation.
Meanwhile, biofuel producers were able to start creating 2025 tax credits using the new DOE calculator, earning credits for their carbon capture, renewable energy usage, and a short list of CI-reducing practices
July 2025: A Major Win for 45Z
One of the biggest milestones came in July 2025 when the “One Big Beautiful Bill” was retained and even extended 45Z through 2029. 45Z was the only tax credit to survive under both administrations, solidifying that 45Z is here to stay.
The extension signaled long-term, bipartisan commitment to the program and gave biofuel producers, ethanol plants, and farmers more confidence that this market opportunity was real and worth pursuing.
But once again, after the celebration came another waiting period.
February 2026: The IRS Preliminary Rule Moves the Needle
In February 2026, the IRS released a massive preliminary 45Z rule totaling more than 170 pages.
This was a major step forward.
The document consolidated numerous earlier notices and guidance documents into one comprehensive framework and answered many critical questions about how 45Z may function operationally. Tucked in the document was about 1 page worth of rules that pertained to the farmers. It essentially said:
- Farmers/feedstock CI reductions will be included and part of 45Z
- A new calculator (45ZCF FD-CIC) will be used to calculate feedstock CI reductions
- An update to the rule will be made to integrate feedstock rules in alignment with the Biofuel Feedstock Rule from the USDA
March through Today
Back to the waiting game, but we may be approaching the end of the tunnel!
The IRS opened a public comment period that closed in April, and a public hearing is scheduled for May 27, 28, and 29 (yeah, what was supposed to be a 1-day hearing turned into 2.5 days of testimony).
We’re honored that Continuum Ag will be providing testimony during that hearing process to help ensure the farmer perspective is represented clearly and aggressively.
The Critical Missing Piece: Feedstock Carbon Intensity Rules
The most important issue for us farmers is still being finalized: how will feedstock Carbon Intensity ultimately integrate into the program?
The fate of the farmers sits heavily under the influence of the USDA.
USDA Update
We are currently in the biggest development of the entire 45Z timeline.
On April 2, USDA submitted updated technical guidelines and an updated Feedstock Carbon Intensity Calculator to the White House Office of Management and Budget (OMB) for review.
Since then, EO 12866 meetings have been occurring between reviewers and key industry stakeholders.
Continuum Ag participated in one of those meetings to help advocate for practical, farmer-focused implementation. We urged the rulemakers to allow for Book and Claim accounting and shared real-world insight into the implications of a healthy carbon intensity calculator.
At this point, we are monitoring developments extremely closely because the USDA rule could be released at any moment.
And honestly, this next release may determine whether 45Z becomes transformational for farmers — or falls short of its potential.
The Questions That Still Matter Most
Several major questions remain unanswered:
- Will USDA’s Feedstock Calculator Be Beneficial Enough?
We need to know whether USDA’s calculator will properly reward real-world farm-level improvements or whether it will fall significantly short of the already-published DOE model. - How Will Third-Party Audits Work?
Verification matters.
Farmers need clarity around:- documentation requirements
- audit expectations
- acceptable recordkeeping systems
- Mass Balance vs. Book-and-Claim
This may be one of the single most important policy decisions remaining.
The accounting structure chosen could dramatically impact how easily farmer Carbon Intensity improvements can connect to ethanol plants and 45Z value creation.
From the farmer’s perspective, this decision is critical.
What Happens Next?
Even after the USDA releases its rule, there are still several additional steps ahead:
- IRS public hearing process
- Review of public testimony
- Revisions to the preliminary rule
- Final OMB review before publication
- The IRS publishes the final 45Z rule
Realistically, the fully finalized IRS rulemaking process could still take many more months — likely even into 2027.
However, that does not mean progress stops.
Biofuel producers can already continue generating and monetizing 45Z credits using preliminary guidance while the final framework develops.
Why “Built For This” Matters
For the last several years, farmers have been preparing for this moment.
We are honored to be part of the farmer journey as they have been improving soil health, implementing conservation practices, organizing farm data, tracking field activities, and working to better understand Carbon Intensity and verification requirements.
And now, as the final pieces of 45Z continue to come together, the operations that are data-ready will be in the best position to move quickly.
That’s exactly why this year’s TopSoil Summit theme is Built For This.
The conversations around 45Z are no longer theoretical. The opportunities are becoming real, and the farmers who have been preparing, learning, and planning are ahead of the curve.
Join us June 10 at Riverside Casino & Golf Resort as we dive into the latest 45Z updates, Carbon Intensity opportunities, USDA developments, verification, audits, and what farmers should be doing now to prepare for what’s ahead. Additionally, we will get to hear from former Ag Secretary Tom Vilsack, the driving force behind the USDA’s involvement in 45Z. Plus, we will hear from RFA President, Geoff Cooper, a leading voice continuing to advocate for farmers in DC today!
Registration is open now and closes at the beginning of June — or when tickets sell out!
Final Thoughts
A lot of progress has been made, and while there is still work ahead, we believe 45Z could provide some of the most impactful benefits for farmers participating in the low-carbon economy.
We’re monitoring developments extremely closely and making sure the voice of farmers is heard loud and clear throughout this process.
Stay tuned — because things are moving quickly.