Why Section 45Z Might Have Little Value in 2025

Section 40B is fairly easy for a biofuel producer to get a large tax credit. Section 45Z not so much.

Photo by Julian Schöll on Unsplash

NOTE - This post has a lot of math including megajoules, BTUs, etc. We believe we have all of the math correct but are not scientists. If any reader with a lot more knowledge in this area finds any errors, please let us know ASAP.

We have posted on Section 45Z before, but in today’s post we are going to refer to another post issued by the University of Illinois that has a lot more detail on Section 40B and Section 45Z tax credits.

The U of I post is much longer than our normal post, but we want to highlight how the current Section 40B tax credit can be a much larger tax credit than Section 45Z under the current Carbon Intensity (CI) scores.