DOE Releases Updated GREET Model, Advancing 45Z Tax Credit Implementation
New carbon-intensity calculations could reshape biofuel economics, influence feedstock demand and determine which fuel pathways receive the largest Clean Fuel Production Tax Credit benefits
The Trump administration has taken a major step toward implementing the Section 45Z Clean Fuel Production Tax Credit with the release of an updated GREET model (link) by the U.S. Department of Energy. Developed in coordination with the Treasury Department and Internal Revenue Service, the updated 45ZCF-GREET model serves as the carbon-accounting framework that will determine the lifecycle greenhouse gas emissions of qualifying transportation fuels and, ultimately, the value of tax credits available to producers.
The release was eagerly anticipated by ethanol producers, renewable diesel companies, sustainable aviation fuel (SAF) developers, corn growers and soybean interests, all of whom have been awaiting greater clarity on how carbon intensity scores will be calculated under the tax credit program.
Unlike previous biofuel incentives that primarily rewarded production volumes, the 45Z credit is tied directly to carbon reductions. The lower a fuel’s carbon intensity score, the larger the tax credit. As a result, relatively small changes in GREET assumptions can significantly affect producer profitability and investment decisions.
Industry reaction: relief after months of mounting frustration
The release lands after months of increasingly pointed pressure from the biofuels industry, which had grown frustrated that producers were operating deep into the 2026 tax year without the tool needed to calculate their own credit values. At a Treasury public hearing in late May, Renewable Fuels Association President and CEO Geoff Cooper called an updated 45ZCF-GREET model “urgently needed,” noting that clean fuel producers were nearly halfway through the 2026 tax year without access to the model that determines emissions rates — and ultimately credit values. He warned that the delays were creating substantial uncertainty and investment risk. In formal comments submitted to Treasury in April, RFA had identified immediate release of an OBBBA-compliant GREET model as the agency’s single top priority, making the release a significant — if overdue — win for the ethanol sector’s advocacy campaign.
Growth Energy, the nation’s largest biofuel trade association, welcomed the announcement. Growth Energy CEO Emily Skor issued the following statement: “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. 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 (OBBBA) 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.”
Clean Fuels Alliance America welcomed the release, arguing that it provides long-awaited certainty for producers making investment and production decisions. “We appreciate the Department of Energy and Argonne National Labs working together to provide this timely update to the 45ZCF-GREET model,” said Kurt Kovarik, vice president of federal affairs for Clean Fuels. “Biodiesel, renewable diesel and SAF producers are grateful that Congress adopted beneficial changes to the 45Z credit last July through the One Big Beautiful Bill. They now have certainty that those changes can be claimed for their current tax year, which for some end as early as this summer.”
Kovarik added that the update supports the Trump administration’s goals of expanding domestic energy production while creating additional demand for U.S. agricultural feedstocks. “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,” he said.
The release addresses one of the industry’s biggest concerns since Congress revised the credit. While lawmakers approved changes intended to improve the economics of domestic biofuel production, producers had been waiting for DOE and Argonne to update the GREET model so those changes could be implemented in practice. Without an updated model, taxpayers faced uncertainty about how to calculate carbon intensity scores and determine the value of the credit.
Clean Fuels Alliance had repeatedly pressed federal agencies for action, highlighting the issue in January correspondence with President Trump, April comments submitted to Treasury on proposed 45Z regulations, and testimony delivered by Kovarik during an IRS public hearing on May 28.
The updated model provides calculations for both 2025 and 2026 fuel production, ensuring producers can evaluate projects under the revised rules immediately.
For the renewable fuels sector, the update is more than a technical adjustment. The GREET model directly influences the carbon scores that determine tax-credit values, making it a major factor in feedstock procurement, production economics and investment decisions. By incorporating the latest statutory changes and emissions data, the revised model reduces uncertainty at a time when producers are seeking clarity on the future of federal clean-fuel incentives.
The release also signals that the Trump administration is moving forward with implementation of the revised 45Z framework, a policy viewed by the biofuels industry as a cornerstone for expanding domestic biodiesel, renewable diesel and SAF production while strengthening demand for U.S.-grown agricultural commodities.
What changed: the OBBBA effect
The most consequential revisions trace directly to last year’s reconciliation law. The One Big Beautiful Bill Act removed indirect land use change (ILUC) from the emissions calculation under the GREET model — a long-sought victory for corn and soybean interests, who have argued for years that ILUC penalties rest on speculative modeling rather than observed market behavior. Stripping ILUC mechanically lowers carbon intensity scores for crop-based fuels, translating into larger per-gallon credit values for ethanol, biodiesel and renewable diesel producers.
OBBBA also restricted eligible feedstocks to those sourced from the United States, Canada and Mexico — a change that effectively shuts out the high volumes of imported used cooking oil from China and elsewhere that had been displacing soybean oil and other domestic feedstocks in renewable diesel production. For soybean processors and crushers, the combination of ILUC removal and the North American feedstock wall represents a meaningful structural improvement in domestic oilseed demand prospects.
The credit math: why CI scores matter so much
The mechanics explain the intensity of the lobbying. To qualify for 45Z, a fuel must produce less than 50 kilograms of carbon dioxide per unit of energy — roughly half the emissions of traditional petroleum — earning a base credit of 20 cents per gallon, with the lowest-carbon fuels eligible for up to $1 per gallon. The standard carbon intensity score for corn sits at 29.1, meaning conventionally produced corn feedstock largely would not push ethanol low enough to capture meaningful credit value on its own.
Conservation practices such as no-till, cover cropping and high-efficiency fertilizers are the levers that pull scores down. That is why ILUC removal and the eventual integration of USDA’s feedstock calculator are not technical footnotes — together they determine whether a typical dry-mill ethanol gallon earns pennies or approaches the credit’s full value.
The soybean side has its own arithmetic. RFA’s Troy Bredenkamp noted earlier this year that removing indirect land use change emissions from the carbon intensity framework would effectively double the value of the 45Z credit for soy-based biofuels and open eligibility for additional feedstocks such as canola. If the updated model delivers on that math, the implications run through soybean oil basis, crush margins and canola acreage decisions across the northern Plains and Canada.
Corn and soybean groups: recognition of conservation practices is the test
Farm organizations have made clear that their verdict on the updated model will hinge on how it treats on-farm practices. Testifying at Treasury’s late-May hearing, National Corn Growers Association First Vice President Matt Frostic said the rule must be finalized “clearly, predictably and quickly” so that farmers’ conservation practices — he cited no-till, strip-till and cover cropping — are properly recognized in carbon scoring. The American Coalition for Ethanol pressed for continued development of USDA’s Feedstock Carbon Intensity Calculator and its direct integration into the GREET model, while the American Soybean Association highlighted the statutory changes reshaping feedstock eligibility.
Groups supporting recognition of regenerative agriculture practices also cautioned that feedstock certification and recordkeeping requirements must remain practical, science-based and transparent, with a market-based book-and-claim option available for compliance — a warning that burdensome paperwork could undercut farmer participation even if the carbon math proves favorable.
For corn growers more broadly, favorable carbon-intensity treatment could enhance long-term demand prospects and create additional incentives for adopting climate-smart farming practices. The updated model reflects ongoing efforts to account for conservation practices and other on-farm emissions reductions, building toward eventual incorporation of USDA’s feedstock carbon-intensity calculator.
The farm economy backdrop
The timing matters for reasons beyond the biofuels sector. The American Coalition for Ethanol told Treasury that corn farmers continue to face painfully high input costs and low market prices, with most forecast to suffer a fourth consecutive year of net profit losses in 2026. Against that backdrop, farm groups view 45Z less as an energy policy abstraction and more as one of the few near-term demand catalysts available. Illinois Corn Growers Association President Mark Bunselmeyer underscored the urgency on timing, noting that 2026 management decisions are already made and planning for the 2027 crop will begin soon — meaning whether farmers can actually capture value from conservation practices hinges on how quickly final rules land.
Implications for sustainable aviation fuel
The release is also particularly important for the sustainable aviation fuel sector. SAF remains one of the most promising pathways for reducing aviation emissions, but project economics depend heavily on federal incentives. The updated GREET model will influence how various feedstocks and production technologies are scored, helping determine which projects receive the greatest support under 45Z. That could influence future investment decisions, plant construction plans and feedstock procurement strategies throughout the biofuels supply chain.
Another closely watched aspect of the update involves the treatment of carbon capture and sequestration, renewable electricity, renewable natural gas and other technologies that can lower lifecycle emissions. Industry participants are expected to spend considerable time analyzing how those provisions affect carbon-intensity scores across various fuel pathways. The renewable natural gas sector brings its own grievances to that analysis: RNG producers have sought changes to modeling that effectively set a floor for manure-based RNG carbon intensity scores around minus 31 kilograms of CO2-equivalent per MMBtu — a constraint that limits credit values for some of the most deeply negative-CI pathways in the program.
Unfinished business: the USDA calculator
The most significant remaining gap involves on-farm carbon accounting. Biofuel groups have stressed that USDA must still complete its feedstock carbon intensity calculator; once finalized, DOE would adopt a 45Z version within the GREET model, followed by additional IRS guidance. The IRS has said the calculator is undergoing testing, peer review and public comment, but USDA has not committed to a timeline, and Treasury guidance suggests the calculator likely will not be published until later in 2026. That leaves farmers who adopted no-till, cover crops or precision nutrient management still waiting to monetize those practices through the credit.
Until that integration occurs, the credit’s value chain stops at the ethanol plant or biodiesel facility gate, and the “climate-smart agriculture premium” that farm groups have envisioned — where conservation practices translate into measurably lower CI scores and higher feedstock prices — remains theoretical.
Remaining refinements on industry wish lists
Even with the update in hand, industry groups have flagged technical issues they want addressed. RFA has urged Treasury to include distinct pathways for ethanol made from cellulosic corn kernel fiber and sorghum kernel fiber — extremely low-emissions fuels excluded from the prior model — and to correct what it calls an unintended penalty in the emissions framework for facilities using combined heat and power systems. RFA has also pushed for a more flexible Provisional Emissions Rate process to accommodate new technologies and incremental improvements at existing plants, retention of Energy Attribute Certificates as a market-based tool for lowering emissions rates, and clarity on the treatment of undenatured versus denatured fuel ethanol.
While the release offers long-awaited guidance, important questions also remain regarding compliance procedures, documentation requirements and final Treasury regulations.
Bottom line
The updated GREET model is ultimately more than a technical emissions calculator. It is the foundation that will determine how billions of dollars in 45Z tax credits are distributed across the biofuels sector, and it converts months of industry agitation into actionable math. The early read favors crop-based fuels: ILUC removal and the North American feedstock restriction both push in the direction of stronger domestic corn and soybean oil demand, supporting future corn demand prospects and encouraging additional investment in carbon-reduction technologies, while the treatment of soybean oil and competing feedstocks could influence the economics of renewable diesel production and future oilseed crushing expansion.
But the implementation sequence is not finished. Final Treasury regulations, the USDA feedstock calculator and resolution of pathway-specific technical issues all remain outstanding — and with the credit now extended under OBBBA, the stakes of getting each piece right have only grown. The industry’s next task will be determining exactly how the revised calculations affect individual fuel pathways and which segments of agriculture and renewable fuels stand to benefit the most. Expect producers, project developers and feedstock suppliers to spend the coming weeks running their specific pathways through the new model, with winners and losers becoming clearer as those calculations circulate.
