45Z Update: Big Opportunity or Big Confusion for Farmers?

45Z is one of the most talked-about opportunities in agriculture right now—but it might also be one of the most misunderstood.

In this What’s Working in Ag segment, Tanner and Corey break down the basics of the 45Z tax credit, what it actually is, and why farmers aren’t the ones receiving the check directly. Instead, this credit is designed for fuel producers—but the real question is whether that value makes its way back to the farm.

They dive into carbon intensity (CI) scores, why your current farming practices already matter, and how everything from tillage to fertilizer use could impact future payments. But the biggest issue? The rules still aren’t finalized.

With guidance from the IRS and Treasury still pending, and key decisions around the GREET model and emissions calculations yet to be locked in, farmers are left trying to make sense of a program that’s already technically in motion.

This episode also opens the door for listener input—who should we bring on to break this down further? Because one thing is clear: this could have a major impact on farm profitability, but only if we understand it.

Key Takeaways

• 45Z is a federal tax credit for low-carbon fuel production
• The credit goes to fuel producers—not directly to farmers
• Farmers impact the value through their carbon intensity (CI) score
• CI score is based on practices like tillage, fertilizer, yield, and inputs
• Lower CI score = higher value for fuel producers
• Rules are still not finalized by IRS and Treasury
• GREET model will be used to calculate emissions and credit values
• Public comment period has closed; hearing expected soon
• Implementation details (payments, tracking, verification) still unclear
• Potential exists—but uncertainty remains high

Have questions about 45Z or know someone we should interview?
📞 Call or text: 515-207-9640
📧 Email: connect@farmforprofit.com

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