- The IRS listed dairy and swine manure as primary feedstocks in its 2026 emissions-rate table for the Section 45Z credit.
- Farm-specific emissions calculations require documented manure practices; unsupported avoided emissions cannot be counted.
- Manure-derived transportation fuel may qualify for negative emissions rates when produced after December 31, 2025.
The IRS issued Notice 2026-53 on September 8, 2026, listing dairy manure and swine manure as primary feedstocks in its 2026 emissions-rate table. The table sets emissions rates used to calculate the Section 45Z Clean Fuel Production Credit, giving renewable natural gas projects based on livestock waste a specified place in the calculation.
The notice applies on and after its issue date. It addresses manure-derived fuels as well as regenerative agricultural practices.
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IRS Chief Executive Officer Frank J. Bisignano said the guidance would help farmers, ranchers and fuel producers pursue opportunities in the domestic biofuels market.
“Today’s guidance helps America’s farmers, ranchers, and fuel producers access growing opportunities in the domestic biofuels market.”
Farm histories can change the emissions calculation
The guidance allows taxpayers, in some cases, to use an alternative fate based on how a particular farm managed manure before producing fuel. That approach can replace reliance on a national average with the farm’s own documented history.
The examples include open lagoons, deep pits and solid storage, along with other prior manure-handling systems. The emissions calculation can account for the change from those earlier practices when a project captures methane from manure.
Documentation is a condition. The IRS says a taxpayer who cannot substantiate the farm-specific practices “will not have avoided emissions included” for that farm’s manure inputs. Without substantiation, the calculation cannot count those avoided emissions.
The agency said the notice also provides additional guidance on manure-derived fuels and regenerative agricultural practices. Those provisions sit alongside the 2026 table’s identification of dairy and swine manure as primary feedstocks; they do not remove the need to support claims about a farm’s past handling methods.
Manure fuel gets a narrow path to negative emissions
Fuel made from animal manure may qualify for negative emissions rates for production after December 31, 2025. The IRS and Treasury said negative rates are prohibited except for transportation fuel derived from animal manure.
The exception distinguishes manure-based transportation fuel from other eligible fuel pathways. The rule is relevant to renewable natural gas projects using anaerobic digesters, which capture methane from livestock waste.
The guidance took effect on September 8, 2026. Its manure-specific treatment applies to fuel produced after December 31, 2025, according to the IRS guidance. The policy is intended to encourage investment in digesters and renewable natural gas projects on livestock farms.
Section 45Z became part of federal clean-fuel policy in 2022. Uncertainty around manure projects had delayed some industry use of the credit, according to the research materials.
Poultry and beef additions are expected later in 2026
Dairy and swine manure appear as primary feedstocks in the current table. Treasury and the IRS said they expect to update the 45ZCF-GREET model later in 2026 to add poultry manure and beef manure as primary feedstocks.
The updated Department of Energy model already added renewable natural gas pathways for food scraps, corn stover, grain stillage and mixed high-moisture organic wastes. It also added pathways for dairy manure and swine manure.
The pending additions would extend the model’s listed manure feedstocks beyond dairy and swine. They are expected later in 2026, while the current table already identifies the two livestock-manure categories.
Biogas producers had waited for the guidance
The American Biogas Council said the notice “provides a clearer path for renewable natural gas (RNG) producers to use the Section 45Z Clean Fuel Production Tax Credit.” The council also said the guidance “incorporates several provisions requested by ABC to encourage investment in new biogas systems that recycle organic waste into RNG for use as a clean transportation fuel.”
Patrick Serfass, the council’s executive director, said many biogas producers had waited to claim the credit until the guidance arrived. The council framed the new provisions as support for investment in systems that turn organic waste into transportation fuel.
This article is for informational purposes only and does not constitute tax advice. Consult a qualified tax professional or CPA about your specific situation.
