Notices 2025-10 and 2025-11
Notice 2025-10 provides that taxpayers who produce transportation fuel that does not have an established emissions rate under the appropriate emissions rate tables may seek a Provisional Emissions Rate (PER) issued by the IRS. Currently, the relevant emissions rate table is provided in Notice 2025-11. Notice 2025-10 further states that, before an applicant may request a PER, they must obtain an emissions value from the Department of Energy (DOE). On July 24, 2025, a Notice of intent to publish the 45Z emissions value request process was published by DOE, which provides a proposed process for obtaining an emissions value from the DOE that may be used to obtain a PER from the IRS.
Notice of intent to publish the section 45Z Emissions Value Request process
The DOE’s guidance defines an emissions value as ‘a value obtained from DOE setting forth DOE’s analytical assessment of the lifecycle greenhouse gas (GHG) emissions rate associated with the production of a type of transportation fuel using a particular primary feedstock and pathway.’ The DOE anticipates the Emissions Value Request process will be similar to the clean hydrogen production PER tax credit process.
The DOE described the process it is contemplating for the PER process in an effort to seek comments from the industry. As part of the contemplated process, the applicant would need to complete and submit a front-end engineering and design (FEED) study or similar indicia of project maturity to begin the PER process. The DOE has initially determined that a FEED study completed based on an Association for Advanced Cost Engineering (AACE) Class 3 Cost Estimate is necessary to sufficiently indicate commercial project maturity for robust emissions analysis. DOE seeks comments on whether alternative appropriate methods for demonstrating project readiness exist.
In order to request an emissions value from the DOE for a given fuel, DOE is considering a requirement for applicants to submit the following information to the DOE: (1) specific sections of the FEED study, as described in the DOE’s section 45Z Emissions Value Request process instructions and (2) a completed section 45Z Emissions Value Request Form, as described in the instructions. Additionally, the Emissions Value Request may contain any additional information that may be beneficial to DOE in completing a GHG analysis of the fuel for which the applicant is requesting an emissions value. Such additional information would be optional, and the applicant’s Emissions Value Request would be considered complete regardless of whether any additional information is provided.
As described, an applicant would send an email to a designated DOE email stating their intent to submit an Emissions Value Request, provided with the name of the applicant’s organization. The DOE would then send the applicant an email with a link to a secure folder where the applicant may upload the Emissions Value Request.
Request for comments
The DOE’s notice of intent requests comments on the DOE’s contemplated PER process. This includes comments on the following:
- Whether additional procedures should be implemented to effectuate the Emissions Value Request process.
- What information to be collected by applicants and whether the DOE should consider requesting additional information.
- Any other aspects of the Emissions Value Request process.
- Necessity of a FEED study to determine project maturity, or whether alternative methods exist.
All written comments must be submitted by Sept. 22, 2025.
Washington National Tax takeaways
The DOE’s notice of intent and request for comments is a welcome step in providing guidance on the section 45Z PER process. Producers of low-carbon fuel through innovative processes or non-traditional feedstocks have been awaiting guidance from the Treasury and the DOE on this topic. Without guidance on the PER process or updates to the DOE’s 45ZCF-GREET model, these producers are unable to claim section 45Z tax credits despite otherwise being eligible for this credit.
With the administration’s focus on the advancement of biofuels, it is expected that the DOE and the Treasury will issue guidance on the PER process in the coming months. Treasury guidance has stated that despite when the PER process guidance is issued, producers may claim credits back to the section 45Z effective date of Jan. 1, 2025. With this knowledge, it is important that producers who expect to be eligible for credits through the PER process proactively comply with additional section 45Z requirements–including tracking and documenting the prevailing wage requirements for repairs and alterations at the facility.
Affected stakeholders should consider submitting comments on the topics requested by Sept. 22, 2025.
