Ethanol Blog

LINCOLN, Neb. (DTN) -- The U.S. Department of Energy updated a key model for the 45Z Clean Fuel Production tax credit on Friday.

The 45Z-CF GREET model updates include improved carbon scoring data for inputs like natural gas that were published in the R&D GREET model in December.

In addition, the model that will be used to determine how much money biofuels producers will receive from the tax credit, provides calculations for fuels produced in both 2025 and 2026. That reflects Congress' changes that took effect at the start of this year.

The Iowa Renewable Fuels Association said in a news release on Friday that although the model update had been anticipated for a while, the latest update marks the first time renewable fuel producers can input data into the model and receive results that reflect the changes Congress made.

This includes the removal of indirect land-use change penalties.

"This update better reflects the role of U.S. biofuels in reducing emissions and supporting rural economies," IRFA Executive Director Monte Shaw said in a statement.

"It moves away from flawed, unscientific assumptions about biofuels and better recognizes their true carbon benefits. IRFA appreciates the DOE's work on the much-needed certainty the new model provides our biofuels producers as they work to qualify for 45Z credits and to produce the ultra-low carbon biofuels increasingly demanded around the globe."

The model includes changes to the 45Z signed into law in July 2025, including also ineligibility for fuels made from feedstocks sourced outside the United States, Mexico and Canada.

Kurt Kovarik, Clean Fuels Alliance America vice president of federal affairs, said in a statement the biofuels industry needs the tax certainty the model will help provide.

"Biodiesel, renewable diesel and SAF (sustainable aviation fuel) producers are grateful that Congress adopted beneficial changes to the 45Z credit last July through the One Big Beautiful Bill," he said.

"They now have certainty that those changes can be claimed for their current tax year, which for some end as early as this summer. This increased certainty will help our industry achieve the administration's goals of generating more domestic energy and creating new domestic market opportunities for farmers -- both of which are critical right now."

Kovarik was among many biofuels industry representatives who testified at a May 28, 2026, IRS public hearing on the 45Z, where he highlighted the industry's need for the updated 45ZCF-GREET model.

Growth Energy CEO Emily Skor said in a statement the 45Z is important to improving the rural economy.

"American farmers and ethanol producers are driving innovation in liquid fuels, and a strong, well-implemented 45Z Clean Fuel Production credit promises to rebuild farm income and open long-term markets for American manufacturing," she said.

"This update to the 45Z CF-GREET model builds on the progress made by Congress and President Trump in the One Big Beautiful Bill Act by reaffirming the removal of flawed indirect land-use change penalties on American biofuels and supporting the eligibility of undenatured fuel ethanol for American exports. The new model marks an important step toward building a regulatory regime that unleashes the full potential of 45Z. We applaud DOE for its work and look forward to continued work by Treasury and USDA to implement final 45Z regulations that set American farmers and ethanol producers on a path toward future success."

Renewable Fuel Standard President and CEO Geoff Cooper offered the following statement:

"We are grateful to see the Department of Energy has released an updated 45ZCF-GREET lifecycle analysis model to reflect changes from the One Big Beautiful Bill Act. This model update is critically important to the ethanol industry in its many operational and investment decisions, and especially as part of the 45Z Clean Fuel Production credit implementation. We look forward to reviewing the new model thoroughly and helping our members move forward with it."

For more information on the model update: https://www.energy.gov/…

Read more on DTN:

-- "45Z Rule Still Hinges on USDA Tool," https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

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