Section 45Z, which was added to the Code by the Inflation Reduction Act of 2022 and amended by the One Big Beautiful Bill Act, provides a tax credit for eligible fuels that are produced after December 31, 2024 and sold before January 1, 2030.~~On February 3, 2026, the Internal Revenue Service (the IRS) and the Department of the Treasury (the Treasury) issued proposed regulations (the Proposed Regulations) regarding clean fuel production tax credits under section 45Z (the 45Z Credit).[1]  Section 45Z, which was added to the Code by the Inflation Reduction Act of 2022 and amended by the One Big Beautiful Bill Act (the OBBBA), provides a tax credit for eligible fuels that are produced after December 31, 2024 and sold before January 1, 2030.[2]  The text of the Proposed Regulations can be found here.  Our prior alert on the changes enacted by the OBBBA to clean energy tax provisions can be found here.~~The Proposed Regulations[3] are lengthy and complex and address a myriad of issues.  Below, we highlight five significant issues and developments.~~[1] Unless indicated otherwise, all “section” references are to the Internal Revenue Code of 1986, as amended (the Code ).~~[2] The legal name for the Inflation Reduction Act of 2022 is “An Act to provide for reconciliation pursuant to title II of S. Con. Res. 14,” and the legal name for the OBBBA is “an Act to provide for reconciliation pursuant to title II of H. Con. Res. 14.”~~[3] The preamble to the Proposed Regulations provides that taxpayers may rely on the Proposed Regulations until final regulations are published in the Federal Register, provided that taxpayers follow the Proposed Regulations in their entirety and in a consistent manner.  91 Fed. Reg. 5160, 5181 (Explanation of Provisions, IX).~~The following Gibson Dunn lawyers prepared this update: Josiah Bethards, Michael Q. Cannon, Matt Donnelly, Abram Dorrough, Blake Hoerster, and Eric B. Sloan.~~Gibson Dunn lawyers are available to assist in addressing any questions you may have regarding this proposed legislation. To learn more about these issues or discuss how they might impact your business, please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any member of the firm’s Tax and Tax Controversy and Litigation practice groups:~~Tax: Dora Arash – Los Angeles (+1 213.229.7134, darash@gibsondunn.com) Sandy Bhogal – Co-Chair, London (+44 20 7071 4266, sbhogal@gibsondunn.com) Michael Q. Cannon – Dallas (+1 214.698.3232, mcannon@gibsondunn.com) Jérôme Delaurière – Paris (+33 (0) 1 56 43 13 00, jdelauriere@gibsondunn.com) Anne Devereaux* – Los Angeles (+1 213.229.7616, adevereaux@gibsondunn.com) Matt Donnelly – New York/Washington, D.C. (+1 212.351.5303, mjdonnelly@gibsondunn.com) Benjamin Fryer – London (+44 20 7071 4232, bfryer@gibsondunn.com) Evan M. Gusler – New York (+1 212.351.2445, egusler@gibsondunn.com) James Jennings – New York (+1 212.351.3967, jjennings@gibsondunn.com) Kathryn A. Kelly – New York (+1 212.351.3876, kkelly@gibsondunn.com) Rachel D. Kleinberg – Palo Alto (+1 650.849.5207, rkleinberg@gibsondunn.com) Brian W. Kniesly – New York (+1 212.351.2379, bkniesly@gibsondunn.com) Pamela Lawrence Endreny – Co-Chair, New York (+1 212.351.2474, pendreny@gibsondunn.com) Gregory V. Nelson – Houston (+1 346.718.6750, gnelson@gibsondunn.com) Benjamin Rapp – Munich/Frankfurt (+49 89 189 33-290, brapp@gibsondunn.com) Jennifer Sabin – New York (+1 212.351.5208, jsabin@gibsondunn.com) Eric B. Sloan – Co-Chair, New York/Washington, D.C. (+1 212.351.2340, esloan@gibsondunn.com) Edward S. Wei – New York (+1 212.351.3925, ewei@gibsondunn.com) Lorna Wilson – Los Angeles (+1 213.229.7547, lwilson@gibsondunn.com) Daniel A. Zygielbaum – Washington, D.C. (+1 202.887.3768, dzygielbaum@gibsondunn.com)~~Tax Controversy and Litigation: Saul Mezei – Washington, D.C. (+1 202.955.8693, smezei@gibsondunn.com) Sanford W. Stark – Chair, Washington, D.C. (+1 202.887.3650, sstark@gibsondunn.com) C. Terrell Ussing – Washington, D.C. (+1 202.887.3612, tussing@gibsondunn.com)~~*Anne Devereaux, of counsel in the firm’s Los Angeles office, is admitted to practice in Washington, D.C.~~© 2026 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.gibsondunn.com.~~Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. Gibson Dunn (and its affiliates, attorneys, and employees) shall not have any liability in connection with any use of these materials.  The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel.  Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.~~Download PDF~~