Why this matters to owner-operators and fleets

Advanced BioFuels USA’s latest roundup highlights two developments with near-term implications for diesel alternatives and compliance risk: the Treasury/IRS has proposed long-awaited rules for the Section 45Z Clean Fuel Production Credit, and California says it will continue enforcing its Clean Truck Check on out-of-state trucks despite an EPA disapproval related to its State Implementation Plan. Together, these moves shape the availability and potential pricing of biodiesel and renewable diesel—and what’s expected of trucks rolling into the Golden State.

What’s in the IRS 45Z proposal

The IRS proposal, issued February 3, 2026, is designed to clarify who can claim the credit, how to calculate it, and what recordkeeping and registration are required. Notably, the clean fuel credit covers qualifying transportation fuel produced in the U.S. after December 31, 2024, and—following legislative changes—sold through December 31, 2029. Producers must be registered with the IRS at the time of production (Form 637). Public comments are due April 6, 2026, and a hearing is set for May 28, 2026.

Clarifies “qualified sales,” tolling arrangements, and other situations common in fuel markets.
Reiterates the need for producer registration under excise tax rules (Section 4101) to claim the credit.
Confirms North American feedstock rules (U.S., Canada, Mexico) for fuels produced after December 31, 2025, aligning with policy shifts in 2025.
Signals updates to emissions accounting via a revised 45Z GREET-based model, with potential recognition of on-farm practices (cover crops, no-till) that could change credit values.

Market takeaways for trucking fuels

For fleets that rely on biodiesel blends or renewable diesel, clearer rules can unlock supply from producers who hesitated amid uncertainty in 2025. Industry responses are mixed: biofuel groups welcomed clarity, while some fuel retail associations criticized complexity and called for simpler incentives. For trucking, the key is whether certainty encourages stable output and competitive pricing in regional markets—particularly in states where renewable diesel demand is strong.

California Clean Truck Check: enforcement still applies to out-of-state trucks

Separate from 45Z, California’s Heavy-Duty Inspection and Maintenance program—Clean Truck Check—remains a compliance priority. On January 27, 2026, EPA finalized a decision disapproving inclusion of out-of-state trucks in California’s air plan; however, CARB says it will continue enforcing the program on all trucks operating in the state. Practically, fleets entering California should proceed as if Clean Truck Check remains fully in force, even though EPA’s action affects how emissions reductions are credited in California’s plan.

What fleets should do now

Talk to suppliers about how they plan to use 45Z: Producers registered under IRS rules may be better positioned to offer dependable flows of biodiesel/renewable diesel as details settle. Ask about any changes to volumes, specifications, or contract terms tied to the proposed regulations.
Track timelines: Comments on 45Z proposed rules are due April 6, 2026; a public hearing is set for May 28, 2026. If your business model depends on low-carbon liquid fuels—from procurement to captive blending—consider participating or coordinating through your trade associations.
Monitor carbon intensity (CI) methodology: If you buy from producers sourcing low-CI feedstocks, potential future GREET updates could affect credit values and, indirectly, pricing or availability.
California-bound? Stay Clean Truck Check ready: Continue reporting, fee payments, and emissions testing compliance for vehicles operating in California, regardless of where they’re registered, to avoid enforcement surprises.

Bottom line

The IRS’s 45Z proposal is a pivotal step toward policy certainty that could stabilize low-carbon liquid fuel supply over the next several years, potentially benefiting fleets that depend on biodiesel and renewable diesel to decarbonize without major equipment overhauls. Meanwhile, anyone running into California should assume Clean Truck Check applies. Keep your compliance routines tight and stay engaged as 45Z rules move from proposal to finalization.

Sources Consulted: Advanced BioFuels USA; Internal Revenue Service/Treasury; DTN Progressive Farmer; Heavy Duty Trucking.

Need to file your Form 2290?

Join thousands of owner-operators and carriers who trust HeavyTax.com for fast and easy HVUT e-filing.

This article was prepared exclusively for truckstopinsider.com. For professional tax advice, consult a qualified professional.