The IRS released Notice 2026-53 on September 8, 2026, providing the 2026 emissions rate table for the Section 45Z Clean Fuel Production Tax Credit and clarifying how changes made by the Working Families Tax Cuts (WFTC) apply to agricultural feedstocks, manure-derived fuels, and regenerative farming practices. If you’re a farmer, rancher, or biofuel producer, this notice is your reference document for calculating and claiming the credit on 2025 and 2026 production.
What the Notice Does
Section 45Z provides a tax credit for eligible clean transportation fuels produced domestically and sold in a qualified sale. The credit amount depends on a fuel’s lifecycle greenhouse gas emissions rate. Lower-emission fuels get larger credits. Notice 2026-53 gives producers the 2026 emissions rate table they need to run those calculations.
The WFTC amended Section 45Z in ways that require technical updates to the 45ZCF-GREET model used to determine emissions rates. Those model updates are still in progress at the Department of Energy. In the meantime, Notice 2026-53 provides transition rules so producers can still determine applicable rates and claim the credit without waiting for the model to be finalized.
Key WFTC Changes That Now Apply
Four changes from the WFTC are now in effect and directly affect how you calculate the credit:
- Indirect land use change excluded. Emissions rates must now exclude emissions attributable to indirect land use change.
- North American feedstocks only. Eligible transportation fuel is limited to fuel derived exclusively from feedstocks produced or grown in the United States, Mexico, or Canada. Producers who previously sourced feedstocks internationally should review whether their supply chain still qualifies.
- Negative emissions rates prohibited. Negative emissions rates are no longer allowed, except for transportation fuel derived from animal manure.
- Distinct rates for manure feedstocks. Fuel derived from specific animal manure feedstocks must use distinct emissions rates, not a generic table entry.
The 2026 Emissions Rate Table: What’s Included Now and What’s Coming
The 2026 table includes dairy manure and swine manure as primary feedstocks with their own distinct rates. The IRS and Treasury anticipate that the 45ZCF-GREET model will be updated later in 2026 to add poultry manure and beef manure as primary feedstocks. Until those updates arrive, the transition rules in Notice 2026-53 address how to proceed.
Agricultural Practices and Farm-Specific Manure Management
Qualifying low-carbon agricultural practices can now be reflected in emissions calculations, consistent with USDA technical guidelines and the 45Z-specific Feedstock Carbon Intensity Calculator. The USDA finalized its rules on regenerative agricultural practices on June 29, 2026. Notice 2026-53 provides a safe harbor for 2025 clean fuel production based on those USDA rules.
The guidance also allows farm-specific prior manure management practices to be taken into account in certain circumstances. That matters because a farm with documented low-emission manure handling could qualify for a meaningfully larger credit than the standard table rate. If you’ve been managing manure in ways that reduce emissions, it’s worth reviewing whether your documentation meets the IRS standard.
One practical detail on timing: the guidance provides transition relief from certain requirements relating to the development of a nutrient budget before nutrients are applied, for fuel produced in 2025 and 2026. This affects producers using agricultural feedstocks who haven’t yet built out a full nutrient management process.
Who This Affects
This guidance is directly relevant to:
- Crop and livestock farmers whose products serve as feedstocks for biofuel production
- Biofuel and sustainable aviation fuel producers calculating credits for 2025 and 2026 production
- Dairy and swine operations with manure management programs that may qualify for enhanced credit rates
- Agricultural cooperatives coordinating feedstock sales and credit pass-through to members
- Fuel producers using used cooking oil or other non-manure feedstocks subject to WFTC transition rules
What to Do Next
Start by reviewing the 2026 emissions rate table in Notice 2026-53 to confirm which rate applies to your feedstocks. If you’re sourcing feedstocks from outside the US, Mexico, or Canada, that’s an immediate compliance issue under the WFTC’s new restriction.
If you use agricultural practices that could lower your carbon intensity, confirm they meet USDA technical guidelines and that you have documentation to support the lower rate claim. The IRS won’t assume reduced emissions without evidence.
Work with a tax advisor familiar with energy credits to determine which emissions rate applies to your specific fuel type and feedstock, whether the nutrient budget transition relief covers your situation, and how to document any farm-specific manure practices you’re relying on.
This is an area where guidance is still evolving. The 45Z proposed regulations issued February 4, 2026 are still under final consideration by IRS and Treasury. Notice 2026-53 fills in specific gaps, but more guidance is expected as the 45ZCF-GREET model is updated. If the 45Z credit is material to your business, track the IRS newsroom for additional notices later in 2026.
BCA works with small business owner-operators on tax strategy, entity structuring, and compliance planning. If you have questions about how the Section 45Z credit or other energy-related tax provisions apply to your business situation, reach out through the contact page.
This article is for general informational and educational purposes only. It does not constitute tax, legal, or financial advice and does not establish an advisory relationship. The Section 45Z Clean Fuel Production Tax Credit involves complex rules, and eligibility depends on your specific facts and circumstances. Consult a qualified tax advisor before making decisions based on this content. BCA provides tax strategy and compliance advisory services; we do not provide legal advice.
Educational information only, not licensed legal, tax, or financial advice. We refer to and partner with licensed professionals when personalized advice is needed. Laws change; no warranty of accuracy or timeliness.
Sources
IRS IR-2026-108, Notice 2026-53 on Section 45Z Clean Fuel Production Tax Credit (September 8, 2026): IR-2026-108 (IRS Newswire)