FutureFuel's Excise Tax Registration Approval: A Green Light for Clean Fuel Production

FutureFuel Corp. (NYSE: FF), a leading manufacturer of diversified chemical products, specialty chemical products, and biofuel products, has received a significant boost in its quest to produce cleaner, more sustainable fuels. The company announced on January 3, 2025, that it has received Excise Tax Registration approval from the Internal Revenue Service (IRS), marking a crucial first step towards claiming the Internal Revenue Code 45Z credit, also known as the clean fuel production tax credit.

The 45Z credit, approved in August 2022 and effective as of January 1, 2025, is designed to incentivize the production of clean fuels by providing a tax credit ranging from $0.20 to $1.00 per gallon, depending on the carbon intensity score of the fuel production process. FutureFuel, with its annual biodiesel production capacity of 60 million gallons, stands to benefit significantly from this credit, potentially receiving annual tax benefits between $12 million and $60 million.



The new credit structure rewards producers with lower carbon intensity scores, encouraging investments in process improvements and technology upgrades to optimize carbon intensity scores. FutureFuel's proactive approach to receiving excise tax registration approval signals its commitment to maintaining competitive advantages in the biofuels market and driving strategic investments in cleaner production processes.

FutureFuel's CEO, Tom McKinlay, expressed his enthusiasm about the registration approval, stating, "We are pleased to have received this registration approval from the IRS, which is a significant step towards accessing the IRC 45Z clean fuel production tax credit. This credit will help us maintain our competitive advantages in the biofuels market and drive strategic investments in process improvements and technology upgrades to optimize our carbon intensity scores."

The new emissions-based credit system is expected to have a positive impact on FutureFuel's production costs and profitability by reducing costs, encouraging process improvements, and enhancing the company's competitive position in the biofuels market. As FutureFuel optimizes its carbon intensity score and maximizes tax credits under the new system, it will be well-positioned to capitalize on the growing demand for cleaner, more sustainable fuels.

In conclusion, FutureFuel's excise tax registration approval is a green light for clean fuel production, signaling the company's commitment to investing in cleaner production processes and maximizing the benefits of the new emissions-based credit system. As FutureFuel continues to optimize its carbon intensity score and drive strategic investments in process improvements and technology upgrades, it will be well-positioned to maintain its competitive advantages in the biofuels market and capitalize on the growing demand for cleaner, more sustainable fuels.