KPMG PRI Becomes First Accredited Verifier for Section 45Z Clean Fuel Tax Credits

KPMG Performance Registrar Inc. has become the first verification body accredited by ANSI's National Accreditation Board to perform third-party certifications under Section 45Z, the US Clean Fuel Production Credit. The accreditation allows KPMG PRI to independently certify eligible fuel production volumes and carbon-intensity information that producers use to support their Section 45Z tax credit claims, with the firm accredited to ISO 14065, the international standard governing organisations that validate and verify environmental information.

 

Section 45Z provides an income tax credit for qualifying clean transportation fuels produced in the United States, with the credit's value tied to both production volume and the fuel's lifecycle greenhouse gas emissions rate, creating a financial incentive structure that rewards producers of lower-carbon-intensity fuel with a larger credit. The credit applies to qualifying fuels produced from 1 January 2025 and, following amendments under the One Big Beautiful Bill Act, sold through 31 December 2029.

 

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Independent third-party verification matters for a tax credit programme structured this way because the credit's value depends directly on a producer's self-reported carbon-intensity data, information that determines how large a tax benefit that producer ultimately receives. Without independent verification, tax authorities and other market participants would need to rely solely on producers' own carbon-intensity calculations to determine credit eligibility and value, creating an obvious incentive for producers to favourably estimate their own emissions data. Third-party certification against a recognised international standard gives regulators and the broader market independent assurance that the underlying production and emissions data supporting a given credit claim has been verified by an accredited party without a direct financial stake in the outcome.

 

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KPMG PRI has provided independent greenhouse gas validation and verification services for more than a decade and has held ANAB accreditation since September 2010, with existing accreditation already covering clean fuels, manufacturing, power generation, chemical production, agriculture, and oil and gas production and refining. Tom Darling, partner and senior vice president at KPMG PRI, said the accreditation positions the firm to bring its existing verification experience specifically to the Section 45Z certification process, while Daniel Leonard, managing director of tax at KPMG US, said clean fuel producers need credible, well-supported information to pursue the credit given the level of documentation and scrutiny expected under the programme.