Diamond Green Diesel secures key approval for 45Z tax credit

Diamond Green Diesel (DGD), a 50/50 joint venture of Darling Ingredients announced that the Internal Revenue Service has approved DGD’s Excise Tax Registration, a crucial step to qualify for 45Z credit.

“Obtaining the excise tax registration is the first step in our ability to monetize the 45Z Producer’s Tax Credit,” said Randall C. Stuewe, chairman and CEO. “We are extremely encouraged by the registration and look forward to guidance concerning 45Z being released in the near future.”

This development comes on the heels of the USDA’s recent announcement of an interim final rule on Technical Guidelines for Climate-Smart Agriculture Crops Used as Biofuel Feedstocks.

This rule, sent to the Office of Management and Budget on December 6th, is expected to further shape the landscape for biofuel production and associated tax incentives.

DGD’s successful registration underscores the growing importance of sustainable fuel production and the potential for significant tax benefits under the 45Z credit.

To note, the credits falling under the 45Z are yet to be finalised by the US Government.

According to reports, Biden administration officials will not finalize highly anticipated guidelines on new clean fuel production tax credits aimed at the airline and biofuel industries before they leave in January.

The tax credit, the engine behind President Joe Biden’s ambitious plan to generate 3bn gallons in production of sustainable aviation fuels by 2030, was due to become effective January 1, but a lack of detailed guidance from the U.S. Treasury would render the program dormant.