Americas News
US Confirms Methanol Bunkers' Eligibility for Tax Credit
The US Department of the Treasury has released interim guidance on IRA Section 45Z Clean Fuel Production Tax, stating that methanol and marine diesel are eligible for tax credits.
"The guidance clarifies that marine fuels that are otherwise suitable for use in highway vehicles or aircraft, such as marine diesel and methanol, are also 45Z eligible," the US Department of the Treasury said in a statement on its website.
The Clean Fuels Production Credit (Section 45Z) is a provision in the US tax law that provides a credit to producers of clean fuels. It encourages the production of renewable and low-carbon fuels, supporting the transition to more sustainable energy sources.
Producers of methanol and marine diesel will be eligible to claim the 45Z credit, while blenders and compressors will not qualify.
"The inclusion of clean methanol in 45Z and the explicit language around its use as a marine fuel will increase the incentive to produce clean methanol as a fuel, both for marine and other uses, here in the United States," Lawrence Navin, vice president of external affairs at Methanol Institute, said in his LinkedIn post.
The credit is effective in 2025, and the guidance comes just days before the US-President elect Donald Trump takes charge of office. It remains to be seen how the regulation will evolve during the Trump administration.
