DOE Updates 45Z GREET Model, Unlocking Credit Clarity for Clean Fuel Producers

The U.S. Department of Energy released an updated 45ZCF-GREET model on June 12, 2026. It gives SAF producers, ethanol refiners, and renewable natural gas developers the tool they need to calculate Clean Fuel Production Tax Credits under Section 45Z. The update reflects statutory changes Congress made in July 2025. It covers fuel production for both 2025 and 2026. Without this model, producers had no verified way to calculate their credit values for the current tax year.

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What Is the 45ZCF-GREET Model?

The 45ZCF-GREET model is the official lifecycle emissions calculator fuel producers must use to determine credit values under the 45Z Clean Fuel Production Credit. GREET stands for Greenhouse gases, Regulated Emissions, and Energy use in Technologies. Argonne National Laboratory developed it under contract with the U.S. Department of Energy.

The 45Z credit does not pay a flat incentive per gallon. It scales directly with a fuel's carbon intensity (CI) score. The lower the carbon intensity, the larger the credit. That makes the GREET model the single most consequential regulatory tool for producers of sustainable aviation fuel (SAF), renewable diesel, ethanol, and renewable natural gas.

To qualify for any credit, a fuel must score below 50 kilograms of CO2 equivalent per million BTUs. Fuels at or above that threshold receive nothing. Producers meeting prevailing wage and apprenticeship requirements earn up to $1.00 per gallon for non-SAF fuels. Those who do not meet those requirements earn a base rate of $0.20 per gallon.

What Changed in the June 2026 Update?

The most consequential change is the removal of Indirect Land Use Change (ILUC) score deductions. Under the previous model, corn ethanol and soybean-based fuels carried penalties for emissions tied to how crop production theoretically displaces land elsewhere in the world. That ILUC deduction pushed many domestic feedstocks out of credit eligibility entirely.

This update reflects what Congress enacted in the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025. The OBBBA removed ILUC penalties for all transportation fuels produced after December 31, 2025. It also locked down feedstock eligibility. Fuels made from feedstocks sourced outside the United States, Mexico, and Canada are now ineligible for the credit.

The update also incorporates improved carbon scoring data for natural gas inputs. That data was published in the R&D GREET model in December 2025. For hydrogen used as transportation fuel, producers calculate well-to-gate emissions using the 45VH2-GREET model first. They then extend to full well-to-wheels emissions using 45ZCF-GREET.

One notable OBBBA change applies specifically to SAF. Before the OBBBA, SAF produced through December 31, 2025, was eligible for a maximum credit of $1.75 per gallon (prevailing wage) or $0.35 per gallon (base rate). For SAF produced after December 31, 2025, the OBBBA eliminated that higher rate. SAF now receives the same rates as other transportation fuels: $1.00 per gallon (prevailing wage) or $0.20 per gallon (base rate).

Change	Before OBBBA	After OBBBA (fuel produced after Dec. 31, 2025)
ILUC penalty	Applied to all biofuel CI scores	Removed
Feedstock origin	No restriction	U.S., Mexico, and Canada only
SAF max credit (prevailing wage)	$1.75/gallon	$1.00/gallon (same as other fuels)
Animal manure RNG	Single generic CI score	Distinct rates per manure feedstock type required
Negative emissions rates	Permitted for qualifying fuels	Prohibited except for animal manure-derived fuels
Credit expiration	Originally December 31, 2027	Extended to December 31, 2029

>> RELATED: The Overlooked Step to Max Out Your 45Z Credit

Why the Industry Was Waiting on This Model

The 45Z credit has been in effect since January 1, 2025. By June 2026, producers still lacked a model that reflected the OBBBA changes. That left ethanol refiners, renewable natural gas developers, and SAF producers deep into the 2026 tax year without a verified number to plan around.

Unlike earlier federal biofuel incentives that paid a flat rate per gallon, the 45Z credit rewards carbon reduction. Small changes in GREET assumptions shift producer profitability directly. An updated CI score changes investment decisions, feedstock procurement strategies, and fuel contract terms all at once.

Clean Fuels Alliance America, the trade group representing biodiesel, renewable diesel, and SAF producers, pressed federal agencies for the model update throughout early 2026. The group submitted comments to Treasury in April. It sent a letter to President Trump in January. Vice President of Federal Affairs Kurt Kovarik also testified at an IRS public hearing on May 28, 2026, where he highlighted the industry's urgent need for the updated model.

How the Credit Amount Is Calculated

The 45Z credit formula is straightforward. A fuel's emissions factor equals 50 kg CO2e/mmBTU minus the fuel's actual emissions rate, divided by 50. That factor is then multiplied by the applicable credit rate per gallon.

The credit scales down as a fuel's CI score rises toward 50 kg CO2e/mmBTU. A fuel scoring at that threshold earns zero. A fuel scoring near zero earns close to the full credit rate. This means a CI score is not just an environmental number. It is a financial input that directly determines producer revenue.

The removal of ILUC penalties in this update is the clearest example of how regulatory methodology shapes project economics for clean fuel producers across the U.S. Analysts at Capstone DC projected in January 2026 that the ILUC removal would allow generic corn ethanol to qualify for roughly $0.10 per gallon from 2026 through 2029. They also projected soybean oil used in renewable diesel could see its credit more than double, from approximately $0.21 to around $0.50 per gallon. These are industry projections. Final values will be confirmed as producers calculate CI scores under the updated model.

What Still Needs to Happen for Full 45Z Implementation

The GREET model update is one of three pieces producers need for full 45Z implementation. The other two remain in progress as of publication.

The U.S. Department of Agriculture is finalizing a Feedstock Carbon Intensity Calculator (USDA FD-CIC). It accounts for climate-smart agriculture practices at the farm level. That calculator is currently in interagency review and is expected to be finalized later in 2026. Once finalized, it will feed into 45ZCF-GREET as an input, creating a direct link between on-farm conservation practices and federal tax credit values.

The U.S. Treasury also still needs to issue final guidance on how producers claim the credit. Proposed regulations were published February 3, 2026. A public comment period ran through April 6, 2026. A public hearing was held May 28, 2026. Final rules have not been released as of publication.

For fuels not listed in the standard GREET emissions table, a Provisional Emissions Rate (PER) process remains available. Producers petition Treasury for a PER after first requesting a calculated emissions value letter from DOE. This matters most for RNG producers and niche fuel pathways not yet covered in the published model.

The updated 45ZCF-GREET model and its user manual are available on the DOE GREET webpage. Calculations cover fuels produced in both 2025 and 2026. Producers can apply the revised rules to the current tax year immediately.

The Model That Moves Markets

A regulatory tool does not attract attention the way a new plant does. But the 45ZCF-GREET update may do more to shape U.S. clean fuel investment in the near term than any single project announcement. It sets the carbon accounting rules for every SAF developer, ethanol refiner, and renewable natural gas producer operating in the country today.

The Joint Committee on Taxation estimated the OBBBA expansion and extension of 45Z will cost taxpayers $25.7 billion from FY2025 through FY2034. At that scale, accurate carbon accounting is not just a compliance requirement. It is a major driver of capital allocation across the entire domestic clean fuels sector. Producers can now run their CI calculations, plan feedstock contracts, and make investment decisions based on a model that reflects current law.

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