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Christianson is your source for renewable fuels specialty tax services. Renewable fuels like ethanol, hydrogen, biodiesel, biogas, and biofuel have many State and Federal incentives. These opportunities can be extremely nuanced. That’s where we step in.
Specialty Tax Services
Our experts help you understand the documentation you’ll need, the potential liabilities you could face, credit caps and consequences of unused credits, and more. We can help you take advantage of low carbon fuel programs like 45Q, 45V, 45Z, 48ITC, and more.
Tax Credits at a Glance
These are a summary of popular tax credits, enacted by the Inflation Reduction Act (IRA), for the renewable fuels industry. The tax experts at Christianson are ready to assist with your questions about the listed tax credits and many other federal and state tax credits and opportunities.
| IRC | Tax Credit | Base / Increased | Expiration |
|---|---|---|---|
| §45Z | Clean Fuel Production Credit (CFPC) | Non-SAF: $0.02 / $1.00 SAF: $0.35 / $1.75 | 12/31/2027 |
| §30C | Alternative Fuel Refueling Property Credit | 6% / 30% up to $100,000 | 12/31/2032 |
| §45V | Clean Hydrogen | $0.60 / $3.00 | 12/31/2032 |
| §48C | Advanced Energy Project Credit | 6% / 30% | 12/31/2032 |
| §48E | Clean Electricity Investment Credit | 6% / 30% | 12/31/2032 |
| §45Q | Carbon Oxide Sequestration Credit | Storage: $17 / $85 Utilization: $12 / $60 | 12/31/2033 |
Descriptions and Details
§45Z: Clean Fuel Production Credit (CFPC)
The §45Z Clean Fuel Production Credit is a tax credit for fuels produced domestically and with a greenhouse gas emissions rate of 50 carbon intensity (CI) or below — applies to Sustainable Aviation Fuel (SAF) and Non-SAF Transportation Fuel. To claim this tax credit, the taxpayer must be registered with the IRS as either a Producer of Non-SAF Transportation Fuel (Activity Letter “CN”) or a Producer of SAF (Activity Letter “CA”). The fuel must be produced in the US in a qualified facility and sold by the taxpayer in the taxable year the credit is being claimed. The fuel must be suitable for highway vehicle or aircraft, has an emmissions rate less than 50 kilograms of CO2e per mmBTU, and is not derived from coprocessing an applicable material with a feedstock which is not biomass.
The §45Z credit (CFPC) was designed to replace historical tax credits for biodiesel/renewable diesel (§40A), alternative fuels (§40), and sustainable aviation fuel (§40B).
§30C: Alternative Fuel Vehicle Refueling Property (AFVRP) Credit
AFVRP property is property used for the storage or dispensing of alternative fuel into the fuel tank of a motor vehicle propelled by that fuel. This includes tanks and pumps used to store and dispense an alternative fuel. The credit cannot exceed $100,000 for any single item of depreciable property and $1,000 for nondepreciable property.
§45V: Clean Hydrogen
This income tax credit is determined for qualified clean hydrogen produced during that tax year, regardless of whether the verification of the production and sale or use of that hydrogen occurs in a later tax year. However, the credit is not eligible to be claimed until all relevant verification requirements, and the verification itself, have been completed for both the production of the hydrogen and the sale or use of that hydrogen.
§48C: Advanced Energy Project Credit
In general, the qualified investment is the basis of eligible property placed in service during the tax year and is part of a qualifying advanced energy project. Eligible property must be depreciable, tangible personal property or other tangible property (not including a building or its structural components), but only if such property is used as an integral part of the qualified investment credit facility.
A qualifying project includes a project that:
- Re-equips, expands or establishes an industrial or a manufacturing facility to produce or recycle specified advanced energy property.
- Installs technology in an industrial or manufacturing facility to reduce greenhouse gas emissions by at least 20%.
- Re-equips, expands or establishes an industrial facility to process, refine or recycle critical materials.
§48E: Clean Electricity Investment Credit
The credit is available to taxpayers with a qualified facility and energy storage technology. A qualified facility must be used for generation of electricity with a greenhouse emissions rate less than or equal to zero. This can apply to an expansion of a facility. Energy Storage must be tangible personal property.
Taxpayers cannot claim both the investment credit and production credit for the same facility. This tax credit replaces the Energy Investment Tax Credit.
§45Q: Carbon Oxide Sequestration Credit
This is a general business credit available for each metric ton of qualified carbon oxide (QCO) captured using carbon capture equipment and either disposed of in a secure geological storage (such as deep saline formations, oil and gas reserves, & unminable coal seams) or used as a tertiary injection in certain oil or natural gas recovery projects or utilized. The applicable dollar amounts are more generous for direct air capture facilities and certain retrofit equipment and are adjusted for inflation after 2026.
Grant Writing
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