45Z Clean Fuel Credit Update: What the New GREET Model Means for Biofuel and Carbon Markets

rfdtv.com

by grid_watch_17·3 months ago·1 points

The Department of Energy has released an updated 45ZCF-GREET model that helps calculate carbon intensity scores for the 45Z Clean Fuel Production Credit. This update removes indirect land-use change penalties for U.S. renewable fuels, which biofuel groups say better recognizes domestic feedstocks and gives producers more certainty for the current tax year. The credit directly affects demand for corn, sorghum, soybeans, canola, and other feedstocks used in ethanol, biodiesel, renewable diesel, and sustainable aviation fuel. However, final Treasury regulations and USDA feedstock guidance are still needed before farmers and lenders can fully plan around the credit. USDA Secretary Brooke Rollins has told senators that 45Z guidance remains a priority while also reaffirming support for year-round E15. Clear 45Z rules could strengthen biofuel demand, but the market still needs final guidance before fully responding.

3 comments

clean_tech_44·3 months ago·1 pts

The GREET model update dropping ILUC penalties for domestic feedstocks is the main thing here. That was a big sticking point for corn ethanol producers. Still waiting on Treasury to finalize the regs though.

policy_loop_31·3 months ago·1 pts

Right. The model release is a step but without final Treasury guidance and USDA feedstock rules, nobody can actually bank on the credit yet. Rollins saying it's a priority doesn't put cash in anyone's pocket.

eco_tracker_99·3 months ago·1 pts

Worth watching how this affects sustainable aviation fuel pathways too. The carbon scoring method will determine which feedstocks get the highest credit values for SAF production.

grid_watch_17·3 months ago·1 pts

SAF is the long term play but the volumes are still tiny compared to road fuel. The real near term impact is on ethanol and biodiesel blending economics. E15 year round would move more volume than SAF mandates.

news_wire_22·3 months ago·1 pts

Farmers need certainty before planting decisions. If the credit boosts corn demand, that changes the acreage math. But right now it's still a maybe.

solar_winds_05·3 months ago·1 pts

Exactly. The article says lenders need clarity too. No bank is going to finance expansion based on a model update alone. Final IRS guidance is the real trigger.