Page 29 - marchapril2026neat

45Z establishes a base credit of twenty cents
per gallon, equivalent for fuels under 50 kg CO₂e/
MMBtu and a maximum credit of up to one dollar per
gallon. Paragraph (b)(20)(iv) of the proposed amend-
ment provides the lower heating values of some
non-liquid fuels for qualifications purposes: The lower
heating value of low-GHG dimethyl ether is 12,417 Btu
per pound, liquefied petroleum gas (LPG) (other than
propane from HEFA) is 19,873 Btu per pound, and LPG
(propane from HEFA) is 18,568 Btu per pound.
How 45Z Impacts Propane
45Z explicitly recognizes low-greenhouse gas NPGA Releases Summary of New NERC Reliability
LPG—including bio-propane—as a qualified trans- Assessment
portation fuel eligible for tax credits. This is a major NPGA's recently published summary of the
structural shift, as bio-propane now receives equal 2025 Long-Term Reliability Assessment (LTRA) issued
policy treatment with SAF, renewable diesel, ethanol, by the North American Electric Reliability Corporation
biodiesel, and renewable natural gas. Because bio-pro- (NERC), evaluates the reliability of the North American
pane is co-produced alongside renewable diesel and bulk power system over the 2026–2035 period and
SAF, the new amendments to 45Z encourage large re- raises growing concerns about the grid’s ability to keep
finery expansions that automatically increase bio-pro- pace with accelerating electricity demand. NERC finds
pane output, making renewable propane economically that long-term reliability conditions are deteriorating
attractive, even though it is a byproduct, driving supply as electricity demand – driven largely by data centers
scaling, lowering costs and expanding market availabili- and broader electrification – grows faster than new
ty over time.
firm generation and transmission infrastructure. The
Under the new amendments, bio-propane assessment concludes that 13 of 23 regions now face
qualifies for very high 45Z credit values because it resource adequacy challenges over the next decade,
typically scores well below the 50 kg CO₂e/MMBtu with projected peak demand growth reaching historic
threshold required. There are also multiple production levels. At the same time, rapid retirements of dispatch-
pathways that may qualify for near-maximum credits, able generation and an increasing reliance on weath-
allowing producers to price bio-propane competitively. er-dependent resources are adding operational risk and
The extra earnings could help to expand current blend- planning uncertainty.
ing into conventional propane supplies and penetrate The report also highlights widespread transmis-
fleet, heating, industrial, and backup power markets sion delays, noting that hundreds of projects have been
dominated by non-renewable fuels.
pushed back due to permitting, siting, and supply-chain
Next Steps constraints. NERC emphasizes that without changes to
The proposed amendment will now undergo planning, permitting, and resource strategies, timing
a comment and response period; Written or electron- mismatches between load growth and infrastructure
ic comments must be received by April 6. A public development will continue to elevate reliability risks
hearing to address these amendments will be held on across much of the country. For the propane indus-
May 28, at 10:00 EST. Requests to speak and outlines try, the assessment highlights an expanding role for
of topics to be discussed at the public hearing must be propane in supporting grid reliability, particularly as
received by April 6. Requests to attend the public hear- on-site, dispatchable power becomes increasingly crit-
ing must be received by 17:00 EST on May 26, 2026. ical amid rising demand and infrastructure delays. For
more information about the NERC Long-Term Reliability
To learn more about 45Z Clean Fuel Credits, Assessment, contact NPGA’s Senior Manager for State
contact Ben Nussdorf or Chris Wagner.■
Government Affairs, Austin Wicker.■

29