EMA
On May 27, the Energy Marketers of America (EMA) submitted oral testimony before the Internal Revenue Service (IRS) urging the agency to finalize its proposed Section 45Z Clean Fuel Production Credit rules in a manner that ensures the credit reaches the full fuels distribution network — including the independent marketers, distributors, and retailers who are essential to getting renewable fuels to American consumers. EMA's testimony focused on two key issues: the "suitable for use" standard for qualifying transportation fuels and the qualified sale criteria governing credit eligibility.
On the first issue, EMA commended the IRS for proposing a definition grounded in practical and commercial fitness for use — a standard consistent with longstanding excise tax regulatory principles. However, EMA requested the addition of a specific regulatory example clarifying that use of a qualifying fuel in a heating oil application does not disqualify it from 45Z credit eligibility. Renewable heating oil is a meaningful and growing low-carbon fuel pathway, and an explicit example would provide producers, blenders, and distributors with the certainty needed to continue investing in this market.
On the second issue, EMA strongly supported the IRS' decision to remove the "use as a fuel" limitation from the definition of "sold for use in a trade or business” – a change that reflects the commercial reality of fuel distribution. A credit regime conditioned on "use as a fuel" at the point of first sale would have arbitrarily excluded intermediate transactions.
"EMA has been actively engaged in the 45Z rulemaking process to ensure our marketers are not excluded from the credit by design. The fact of the matter is that fuel moves through a series of intermediate commercial hands before reaching the ultimate consumer, and our marketers play a critical role in that supply chain. The final rules must reflect that reality," said EMA President and COO Rob Underwood.
Taken together, EMA argued, these policy choices will determine whether Section 45Z delivers on its full potential as a broad-based renewable energy incentive or becomes a narrowly confined benefit that weakens the role of downstream stakeholders, those closest to consumers.
