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Renewable natural gas, biogas and ethanol projects can face federal tax credit compliance requirements tied to construction, labor, sourcing and fuel production. Which requirements apply depends on the credit, project configuration and project timeline.
Empact protects tax credit value by combining AI-enabled technology with specialized expertise to identify and resolve compliance issues and maintain the record for the life of the credit.
| Credit | What it covers | What Empact manages |
|---|---|---|
| Section 45Z, clean fuel production credit | Production of qualifying low-emissions transportation fuel, including qualifying renewable natural gas and ethanol | PWA documentation where required and supporting compliance records |
| Section 48, legacy investment tax credit for qualified biogas property | Certain qualified biogas property under the pre-2025 credit framework | Applicable prevailing wage and apprenticeship documentation, domestic content documentation where pursued, beginning-of-construction evidence, and supporting compliance records |
| Section 48E, clean electricity investment credit | Qualifying zero-emissions electricity generation facilities and energy storage technology where the project configuration meets the credit requirements | Applicable prevailing wage and apprenticeship documentation, domestic content documentation where pursued, PFE compliance where relevant, beginning-of-construction evidence, and supporting compliance records |
| Section 45Q, carbon oxide sequestration credit | Projects that include qualifying carbon capture, sequestration, or utilization | Applicable prevailing wage and apprenticeship documentation and supporting compliance records for the carbon capture portion of the project |
Tax rules and guidance continue to evolve. Which credit and compliance requirements apply depends on the project's configuration, timing and facts.
Empact maintains the compliance record against the requirements applicable to each project.
Section 48E applies to electricity generation. A project that produces RNG for pipeline injection or transportation fuel does not qualify for 48E unless it also generates electricity, and where it does, only the generation equipment is eligible.
Digester and gas cleaning and conditioning equipment qualified under the legacy Section 48 credit. Section 48E does not cover that equipment. On these projects, documenting when construction began is what determines whether the digester earns a credit at all.
RNG and biofuels projects can bring clean energy tax credit compliance requirements into businesses whose core operations are agriculture, fuel production or waste management. The tax credit may depend on decisions and evidence involving construction, labor, feedstocks, suppliers and fuel production.
The challenge is connecting construction, labor, feedstock, supplier and fuel-production records into one compliance program and identifying issues while they can still be addressed. NexusIQ™, Empact's AI-enabled compliance platform, reviews the underlying evidence and identifies issues as they emerge. Dedicated compliance specialists work with the project team to resolve them, and Empact maintains the compliance record throughout the tax credit lifecycle.
Compliance obligations reach every party on a project. Empact works with each of them.
The requirements depend on the project's credit, configuration and timeline. Compliance considerations can include prevailing wage and apprenticeship, beginning of construction, domestic content where relevant, prohibited foreign entity restrictions, and fuel-specific requirements. Empact identifies compliance issues as they emerge, works with the project team to resolve them, and maintains the compliance record throughout the tax credit lifecycle.
Section 45Z is a production-based credit for qualifying clean transportation fuel produced in the United States and sold in a qualifying sale. Depending on the facts and qualification requirements, renewable natural gas and ethanol can fall within the clean fuel framework. Eligibility depends on requirements including the fuel, production pathway, emissions factor, producer registration and, for fuel produced after 2025, applicable feedstock restrictions.
Only where the project includes qualifying zero-emissions electricity generation or qualifying energy storage technology. A project that produces renewable natural gas for pipeline injection or transportation fuel does not qualify for Section 48E solely because it produces RNG.
Section 45Q can be relevant where a project includes qualifying carbon capture, sequestration or utilization. It is not a general RNG or biofuels credit, and its application depends on the carbon capture configuration and project facts.
These projects can combine agricultural operations, construction work and fuel-production activities on the same site. A worker may perform different types of work over the course of a project, and the correct prevailing-wage classification depends on the work actually performed. That makes accurate job classification and contemporaneous documentation important throughout construction.
Empact manages federal clean energy tax credit compliance, identifying and resolving issues across projects and contractors.
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