Propane Tax Credits: Autogas and 45Z

NPGA’s advocacy team works to include propane in a variety of federal programs, from grant programs to tax credits. One such credit available to propane used in the transportation sector is the 45Z credit.

The Section 45Z Clean Fuel Production Credit, established under the Inflation Reduction Act, offers a tax incentive for U.S. producers of clean transportation fuels, including propane, based on the fuel’s lifecycle greenhouse gas (GHG) emissions. Beginning in 2025, Section 45Z replaces the Section 40A and 40B tax credits for producing clean transportation fuel.  The 45Z credit is available for fuels produced and sold between January 1, 2025, and December 31, 2027. For more, see the IRS guidance and FAQs on this credit.

Questions? Contact Director of Regulatory Affairs and Associate General Counsel Kate Gaziano.