Fuel Retailers Urge Treasury to Ensure 45Z Tax Credit Lowers Costs for Consumers

WASHINGTON – Trade groups representing the nation's truck stops, travel centers, and fuel marketers testified before the U.S. Treasury Department on May 27, 2026, urging officials to finalize rules for a major clean energy tax credit in a way that ensures its financial benefits reach consumers at the pump.

In their testimony, NATSO and SIGMA: America’s Leading Fuel Marketers argued that the implementation of the Section 45Z Clean Fuel Production Tax Credit must be structured to prevent the incentive from being captured exclusively by upstream fuel producers. The groups contended that unless fuel retailers and marketers can access the credit's value, the savings will not be passed on to the public, undermining a key goal of the Inflation Reduction Act (IRA), which established the credit.

This debate over the mechanics of a tax credit highlights a critical issue for many small and mid-sized businesses: federal policy can create significant economic opportunities or operational headaches depending entirely on the fine print of its implementation. For companies involved in transportation, logistics, or fuel distribution, the final 45Z rule will directly impact a primary operating cost. The core concern is that if the credit’s value is locked up at the production level, it will distort the market without providing the intended relief to the businesses and consumers who actually buy the fuel. In our experience, the complexity of new tax legislation often leaves smaller enterprises struggling to adapt.

We believe the most effective policies are those that create clear, auditable pathways for incentives to flow through the supply chain to the end user. The arguments made by the fuel marketing groups underscore the need for practical, workable regulations that reflect real-world market dynamics. Navigating these evolving rules is a significant challenge, which is why specialized guidance on tax preparation and compliance is so vital for businesses looking to manage costs and capitalize on new programs. To understand how your business can prepare for changes stemming from the 45Z credit and other IRA provisions, the advisory team at C&S Finance Group LLC provides expert analysis at csfinancegroup.com.

The Section 45Z credit, set to take effect in 2025, is a central pillar of the IRA’s climate provisions. It is designed to replace a patchwork of existing biofuel tax incentives with a single, technology-neutral credit for producers of low-emission transportation fuels. The value of the credit is tied directly to a fuel's lifecycle greenhouse gas emissions score—the cleaner the fuel, the more valuable the credit. This performance-based structure is intended to spur innovation across a range of fuel types, including renewable diesel, biodiesel, sustainable aviation fuel, and ethanol.

During the hearing, representatives for NATSO and SIGMA emphasized that their members are the crucial link between fuel producers and the final consumer. They argued that the competitive nature of the retail fuel market means that any cost savings they realize are quickly passed on to customers to gain a competitive edge. If the credit is structured in a way that only large, vertically integrated producers can claim it, they warned, there is no guarantee those savings will ever trickle down the supply chain.

The organizations are advocating for a regulatory framework that allows the tax credit to be transferred or shared, enabling fuel blenders, distributors, and retailers to directly benefit. They posit that this model is the most efficient mechanism for translating the tax incentive into lower prices for trucking fleets, independent owner-operators, and everyday drivers. This position reflects deep-seated industry concerns about market concentration and ensuring that the benefits of federal energy policy are distributed broadly.

The Treasury Department and the Internal Revenue Service are currently in the final stages of the rulemaking process for 45Z. This involves interpreting the legislative text passed by Congress and writing the detailed regulations that govern how the credit will be calculated, claimed, and verified. The public hearing on May 27 was a key opportunity for industry stakeholders to provide direct feedback on the proposed rules before they are finalized.

A critical point of contention in the rulemaking process has been the scientific model used to calculate the lifecycle emissions of fuels, known as the Greenhouse gases, Regulated Emissions, and Energy use in Technologies (GREET) model. Different versions and inputs into the model can produce vastly different emissions scores, directly impacting the financial value of the 45Z credit for a given fuel. The final guidance from Treasury is expected to clarify which version of the model is acceptable and what documentation producers will need to provide.

For thousands of small and mid-sized businesses across the United States, the outcome of this regulatory process carries significant financial weight. Fuel is one of the largest variable costs for companies in trucking, delivery, construction, and agriculture. A successful implementation of the 45Z credit that lowers diesel and gasoline prices could provide a meaningful boost to their bottom lines, while a flawed rule could create market uncertainty and fail to deliver promised savings.

The Treasury Department has not provided a definitive timeline for releasing the final 45Z rule, but with the credit scheduled to begin in less than a year, pressure is mounting from all sectors of the energy and transportation industries. Stakeholders will be closely watching for the final guidance, which will shape investment decisions and the competitive landscape of the U.S. fuel market for the foreseeable future.