‍Internal Revenue Service                                                                                        
CC:PA:01:PR (Notice 2025-10), Room 5203,
P.O. Box 7604
Ben Franklin Station
Washington, DC 20044

Regarding: Notice 2025-10 Comments on Proposed Section 45Z Clean Fuel Production Credit: Request for Public Comments

On behalf of incite.ag, a farmer-founded Carbon Intensity (CI) scoring company providing software-supported Carbon Intensity scoring services across biofuel supply chains, we appreciate the opportunity to provide comments on Notice 2025-10 and the implementation of the Section 45Z Clean Fuel Production Credit. Our insights are derived from industry-leading experiences in data capture and carbon intensity scoring for clean fuels and their feedstocks and aim to enhance the development of effective federal policies and strategies. The following underscores the key elements which we believe will lead to an effective and resilient program, allowing this administration to unlock the innovation and production power of the American farm-supply chain.

IRA section 45Z is more than just a clean fuel incentive—it is a strategic lever to unleash a golden era of American energy dominance; as described by leaders across this administration. With the right rules in place, this credit can catalyze tremendous amounts of new financial investment, reduce dependence on foreign oil, drive down consumer fuel costs, and build a durable foundation for rural economic growth—all while improving the efficiencies of midwestern commodity production. Unleashing the full potential of the American farm and fuel economy requires policies that are predictable, pro-growth, and grounded in science. Section 45Z, if implemented effectively, will be the flagship of this administration’s domestic clean energy portfolio—supporting farmers, rural communities, and innovators who are ready to lead.
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Incite.ag works directly with those innovators– fuel producers, grain aggregators, and farmers across the U.S, who are seeking to utilize on-farm and facility-level data to unlock novel value-creation programs. Our comments reflect practical insights from the field—what is working, what challenges our partners are facing, and how the IRS can unlock the full potential of this once-in-a-generation clean fuels policy.
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The recommendations that follow are rooted in that experience and guided by one clear objective: helping the U.S. Treasury and IRS deliver a credit that is feasible, fair, and transformative—not only for the domestic-energy economy, but for the future of American agriculture and rural innovation. With decisive implementation, 45Z can become the cornerstone of this administration’s energy legacy—and a catalyst for America’s resurgence as a global energy leader.
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Accelerate Delivery of Final Guidance and Allow Transitional Flexibility
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Incite.ag joins others in urging the IRS to deliver final guidance as quickly as possible, and to provide transitional flexibility for the 2025 tax year. As of this writing, the window for planning, data collection, certification, and facility-level upgrades is rapidly closing. Without finalized rules, producers face paralyzing uncertainty—and may delay or abandon plans to deploy capital and launch innovative rural projects.

Incite.ag joins others in urging the IRS to deliver final guidance as quickly as possible, and to provide transitional flexibility for the 2025 tax year. As of this writing, the window for planning, data collection, certification, and facility-level upgrades is rapidly closing. Without finalized rules, producers face paralyzing uncertainty—and may delay or abandon plans to deploy capital and launch innovative rural projects.

We recommend:

• Publishing final rules no later than June 10, 2025
• Allowing retroactive adjustments for producers who implement improvements prior to final rule delivery
• Accepting alternative forms of documentation (e.g., engineering records, affidavits, invoices) for the first year of the program

Key Takeaways for Rapid guidance paired with transitional leniency will jumpstart program participation and ensure the credit serves its intended purpose beginning in 2025—not in its final months.
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‍Include Corn and Sorghum Kernel Fiber as a Qualified Feedstock

We strongly urge Treasury and IRS to explicitly include corn and sorghum kernel fiber-based ethanol as a qualified feedstock under Section 45Z, with an addition inclusion of sorghum oil for biodiesel and renewable diesel production. These production pathways are already recognized by the California Air Resources Board (CARB) under the LCFS program and have demonstrated significantly lower lifecycle emissions due to its unique biochemical conversion profile and separation from starch-based fermentation streams.

The current structure of Notice 2025-10 does not adequately distinguish between traditional corn starch-based ethanol and fiber-based ethanol, which may result in either exclusion or unintended penalties due to upstream allocation methodologies. Recognizing corn kernel fiber-based ethanol ensures that innovation in enzymatic breakdown, advanced fermentation, and fiber separation technologies are rewarded through accurate CI scoring and meaningful credit access.

Failing to recognize kernel fiber ethanol on its own merits will create a disincentive for facilities who have already invested in the capital and operational improvements necessary to deploy these processes. This is contrary to the intent of 45Z, which is to reward innovation and investment regardless of feedstock origin, as long as emissions reductions and efficiencies they are verifiable, certified, and demonstrably lower than the baseline.

Allow Partial-Year Qualification to Reflect Dynamic CI Improvements

Given the delays in regulatory guidance and the limited three-year window for credit availability (2025–2027), the ability to claim credits for partial-year production volumes is essential. We recommend that IRS allow producers to select qualifying fuel batches or production months within a calendar year, rather than requiring an annualized average CI score across all production volumes.

Clean fuel producers are actively making investments in carbon reduction technologies with the intention of capturing this credit, many of which will only begin delivering CI reductions in a partial-year basis in 2025 and/or 2026. Requiring a 12-month weighted average before recognizing these gains would delay credit eligibility well into 2026 or 2027, which defeats the purpose of incentivizing near-term improvements.

This rigid approach also creates asymmetry between facilities who completed upgrades prior to guidance issuance and those who waited for clarity. Allowing partial-year windows—such as Q3–Q4 2025 or a specified “credit-effective” date—will enable all producers to capitalize on new emissions reductions and avoid wasting valuable time within the narrow eligibility window. It also encourages iterative improvements and real-time tracking of CI performance, which is more aligned with how environmental performance unfolds in practice.

Establish a Grace Period and Grandfathering for 2024 Practices and Production

We strongly urge the inclusion a grace period and/or grandfathering provision for clean fuel producers and feedstock suppliers who adopted climate-smart agricultural (CSA) practices or produced qualifying low-CI fuel in good faith prior to the publication of final 45Z guidance.

Due to the delayed issuance of rules and the high level of regulatory uncertainty throughout 2024 and early 2025, many growers and producers implemented practices, marketed their commodities, an/or completed production cycles without knowing whether or how those actions would ultimately be creditable. Penalizing early adopters for lack of clairvoyance—especially those who aligned with well-established programs like the LCFS, USDA pilot programs, or NRCS conservation standards—would run counter to the intent of the statute and disincentivize proactive emissions reductions.

We recommend the IRS:

• Grandfather CSA practices implemented during the 2024 crop year if they align with USDA’s Beta FD-CIC or other widely accepted agronomic standards in place at the time and can produce reasonable support documentation to substantiate those management claims.
• Allow fuel production marketed / sold in 2024 or early 2025 to qualify for the credit (once effective) if the associated CI scoring and operational protocols meet the prevailing industry standard at the time of production.
• Accept alternative documentation—such as agronomic records, third-party attestations, processor-level data logs, or voluntary LCFS/SAF/CFP documentation—for 2023/2024 activities that predate formal rulemaking.
  

This approach would protect early movers, uphold fairness, and ensure that the credit rewards actual emissions reductions regardless of timing. It also reflects the practical realities of agricultural and fuel production timelines, which cannot be easily paused while agencies finalize regulatory language. In short, the grace period should not be viewed as an exemption—but as a necessary mechanism to align timing, preserve credibility, and maintain momentum in the rapid deployment of climate-smart practices across the supply chain.

Move Away from Emissions Factor (EF) Rounding Thresholds

We urge the IRS to eliminate the current kgCO₂e/MMBtu rounding threshold that determines credit eligibility tiers for clean fuel producers. Instead, we recommend implementing a linear credit incentive of $0.02 per gallon for each tenth of a point (.1 gCO₂e/MJ or equivalent) the fuel falls below the 50 kgCO₂e/MMBtu baseline.

The rounding approach is unintentionally exclusionary, especially in cases where a producer has reduced emissions meaningfully but not enough to meet the 47.5-point cut-off (i.e., they fall at 47.6). These narrow margins of disqualification not only penalize the very behavior the credit is designed to encourage—they also introduce volatility and ambiguity into capital planning. A linear incentive provides a clear, incremental reward structure for reducing emissions, even for producers who are close to—but not yet below—the next rounding tier.

This change is especially important considering the delay in final rulemaking. Many producers are ready to implement improvements now, but will hold back if a binary, tiered structure prevents them from earning any credit until they hit arbitrary milestones. A linear approach gives fuel producers confidence that any reduction matters and accelerates progress across the margin, not just at the extremes.

Incorporate USDA Beta FD-CIC and Technical Guidelines for Agriculture

We strongly support recognition of USDA’s Beta FD-CIC model and technical guidance for climate-smart agriculture (CSA) practices as an integral part of the 45Z CI scoring system. The Beta FD-CIC provides a scalable, science-based, and regionally adaptive framework for capturing on-farm emissions reductions tied to nitrogen management, cover crops, reduced tillage, and other CSA strategies.

Treasury and IRS should formally incorporate an updated framework into the final 45Z rules by reference, and allow CI scoring adjustments tied to verified CSA practices to be submitted through IRS-registered platforms or certifiers. The USDA’s approach ensures consistency with the GREET model while enabling farmer participation through common-sense verification pathways—such as affidavits, expert attestations, and agronomic data review.

Clarify Sale, Transferability, and Credit Qualification Pathways

Producers require clear, unambiguous guidance on how 45Z credits can be earned, transacted, and monetized. Today’s draft language around what constitutes a “qualifying sale” is too narrow and risks disqualifying otherwise valid credit-generating transactions, especially in cases where fuel is sold through third-party marketers, brokers, or multi-facility pooling arrangements.

We urge the IRS to adopt a chain-of-title approach that allows for qualified sales as long as:

• The mass balance of production and sale is maintained.
  
• The credit-eligible gallons are verifiably matched to a producer.
  
• There is a valid commercial transaction to an unrelated buyer.
  

This structure is already used in other clean fuel programs and provides the flexibility needed for clean fuel producers to sell through intermediaries while maintaining auditability.
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Additionally, producers and their financiers require clarity on the transferability of the credit itself. If a CPA or qualified law firm is willing to issue a third-party attestation of eligibility, will the IRS accept this as valid for tax reporting and sale? This clarity will significantly reduce legal uncertainty and unlock the financial instruments needed to bring investment capital into the 45Z marketplace.
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Support Congressional Extension to a 13-Year Credit (through 2037)
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Although outside the IRS’s direct purview, we encourage Treasury to support Congressional efforts to extend the 45Z credit through 2037, in alignment with other long-term clean energy incentives. A three-year credit window is simply not long enough to catalyze the type of capital investment and infrastructure buildout necessary for sustained emissions reductions.
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Fuel producers, technology developers, and farmers need predictability. With a longer runway, they can invest in soil health, renewable energy systems, biogas recovery, and new fuel pathways that may take several years to come online. The return on investment must match the duration of the policy—three years is insufficient. We ask the IRS to highlight this issue and to advocate for an extension that aligns with the long-term vision of unleashing America’s energy dominance.
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Clarify Provisional Emissions Rate (PER) Application Path
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Treasury must clearly define how producers can apply for and utilize a Provisional Emissions Rate (PER) under the 45Z program. This is especially important for first movers and innovative fuel pathways that have not yet been modeled in GREET but are available in a customized modeling process through an R&D GREET or GREET1 Dependency.
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We recommend establishing a step-by-step process that includes:

• Submission of technical documentation
  
• Guidelines for recognition of user defined data versus GREET-defaults
  
• Option for recognition of unique and/or novel co-products outside of Distillers Grains (Ex: high protein yeast)
  
• Third-party verification of process data
  
• Timeline for IRS review and provisional use approval
  
• Mechanism for updating PERs as empirical data becomes available
  

Without this clarity, producers with novel processes or regional efficiencies will remain sidelined while awaiting full GREET integration—delaying their participation and distorting market access.
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Narrow Prevailing Wage & Apprenticeship Requirements for Ancillary Infrastructure
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The IRS should narrowly define the "fuel production process" as it relates to prevailing wage and apprenticeship (PWA) standards, to avoid burdening portions of facility operations that are not central to emissions reduction or fuel conversion.
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For example, dryers used for distillers’ grains (DDGS), administration buildings, and storage infrastructure should not be swept into wage requirements that were clearly intended to apply to core processing equipment and clean fuel infrastructure. Narrowing the definition reduces compliance costs while maintaining policy intent and targeting labor standards where they matter most.
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We urge the Treasury and IRS to consider and implement practical solutions regarding PWA. While we recognize the importance of prevailing wage and apprenticeship requirements, implementing them in rural areas presents unique challenges. Clean fuel production facilities are often located in regions with limited access to union labor and specialized trade workers. Some states have few-to-no approved apprenticeship programs, dramatically limiting the ability to find qualified, semi-local labor. Safe harbor provisions, good faith exemptions, and an efficient error correction process would ensure compliance without discouraging investment.

Addressing Administrative Challenges and Credit Accessibility

• Excise Tax Registration:
  The process should be streamlined to avoid unnecessary administrative burdens for Clean Fuel producers already subject to extensive verification and compliance requirements.
• Gallon Equivalency for Gaseous Fuels:
  Aligning the 45Z baseline for determining “gallon equivalent” for non-liquid fuels with the existing Renewable Fuel Standard (RFS) approach (i.e., using ethanol as the baseline instead of gasoline) would simplify implementation and promote consistency across federal programs.
• Safe Harbor Protections:
  The upcoming proposed rule should clarify that fuel producers utilizing the 45ZCF-GREET model in good faith are protected from penalties due to inadvertent errors in emissions calculations.
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Revisit USDA Guidance on Nitrogen, Inhibitors, and Manure Management
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We urge Treasury and IRS to work closely with USDA to refine and modernize the nitrogen management components of the USDA Beta FD-CIC and related technical guidelines that underpin CI scoring for 45Z. The current framework underrepresents practical, science-backed management strategies that producers are already using to reduce nitrous oxide emissions and overall nitrogen loss, particularly in Midwestern corn and sorghum systems.
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First and foremost, the guidance must be revised to recognize split-applied nitrogen systems—especially those involving early spring or pre-plant applications followed by in-season top-dress or side-dress treatments. These practices are widely used in conservation-minded production and align with agronomic principles that match crop uptake curves. Penalizing these systems simply because the initial nitrogen wasn’t withheld until midseason ignores the environmental benefits of precise, adaptive fertilization and discourages the most effective forms of nitrogen stewardship.
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In addition, the model should be updated to reflect the use of nitrification inhibitors (NIs) more flexibly and realistically. Currently, the modeling assumptions often exclude in-season NI use from recognition, even when these inhibitors are applied to the majority of total nitrogen used. We recommend allowing credit for NI use as long as a majority of nitrogen applied is treated with a certified NI product, even if applied in multiple passes across the growing season. This mirrors common best practices and reflects the real emissions-reducing impact of inhibitors on total N₂O formation.
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To preserve scientific integrity, only NIs certified through third-party data and applied at approved agronomic rates should be eligible for CI credit. Treasury and IRS should coordinate with USDA and established standard-setting bodies (such as AAFPCO) to maintain an up-to-date list of validated products and approved usage protocols.
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Additionally, we encourage Treasury to broaden the nitrogen crediting framework to include urease inhibitors and other cultural or chemical practices that reduce total nitrogen use and prevent emissions. Practices that directly or indirectly suppress ammonia volatilization, reduce leaching, or delay conversion to nitrate have a material impact on CI and should be recognized accordingly in the FD-CIC or 45ZCF-GREET modeling structure.
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Lastly, we reiterate our prior recommendation to the USDA’s request for comment on their technical guidelines for CSA biofuel crops that manure applications be fully integrated as a qualifying CSA practice. When properly documented and managed, manure reduces reliance on synthetic fertilizer, contributes to soil carbon, and represents a circular nutrient strategy that directly reduces lifecycle emissions. Verification can rely on existing farm records, nutrient management plans, or processor-attested delivery logs, supported by grower declarations where necessary.
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Conclusion:
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The Section 45Z Clean Fuel Production Credit is not merely a tax incentive—it is one of the most powerful tools in this administration’s arsenal to unleash what this administration has described as a “golden era of American energy dominance.” This is not hypothetical. With clear, science-based, and producer-friendly implementation, 45Z will unlock a decade of innovation, reinvestment, and growth across the American farm and fuel economy.
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At a time when U.S. agriculture and domestic energy production face global competition and economic uncertainty, Section 45Z offers a clear path forward—one where America leads by investing in its own rural communities, rewarding innovation, and supporting energy independence from the ground up. But this promise will only be realized if the rules enable real-world adoption—recognizing efficient farming practices, validating facility-level innovation, and removing barriers to credit access.
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From provisional emissions rates to prevailing wage clarity, and from kernel fiber ethanol inclusion to flexible partial-year crediting, our recommendations are built on direct experience with farmers, aggregators, and clean fuel producers who are already acting—waiting only for regulatory certainty to accelerate. The Treasury and IRS have the opportunity to take decisive action and deliver a program that is feasible, fair, and future facing. Section 45Z, properly implemented, can serve as the cornerstone of this administration’s climate and rural economic policy—a policy that doesn’t ask America to choose between environmental leadership and domestic production, but empowers both.

We thank you for the opportunity to provide these comments and stand ready to support Treasury and IRS in building a clean fuel framework that rewards the ingenuity and hard work of American producers, now and for the next generation.

Sincerely,

Preston Brown
President, Founder
Incite.ag
preston@incite.ag
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Incite.ag guides producers across the agricultural supply chain to Turn Emissions into Income. Incite.ag’s CI scoring system unlocks novel revenue streams and empowers producers to take control of their unique CI Scores. Learn more by hitting the link below or reach out to the team directly at success@incite.ag or 815.373.0177.