DOE Revises 45Z GREET Model: Lower Carbon Intensity Scores and Stricter Standards for Clean Fuel Credits
On June 12, 2026, the U.S. Department of Energy (DOE) released major updates to the 45Z Greenhouse Gases, Regulated Emissions, and Energy Use in Technologies (GREET) Model. This significantly revises how carbon intensity (CI) scores are calculated for the Section 45Z Clean Fuel Production Tax Credit, beginning with fuels produced after Dec. 31, 2025. The revised model lowers CI scores for many fuel pathways by eliminating indirect land use change (ILUC) emissions from crop-based fuels, expanding facility-specific lifecycle modeling, and enhancing carbon capture methodologies. It introduces new qualification and compliance requirements, including stricter North American feedstock sourcing standards, revised renewable natural gas (RNG) pathway eligibility, and increased documentation expectations. For clean fuel producers, these changes may increase available tax credits while creating new planning and qualification opportunities. For tax credit buyers, the updates heighten the importance of diligence around lifecycle modeling assumptions, feedstock traceability, and substantiation of claimed credits.
Elimination of Indirect Land Use Change (ILUC) Emissions
One of the most significant revisions to the updated 45Z GREET Model is the elimination of Indirect Land Use Change (ILUC) emissions from CI score calculations for transportation fuels produced after Dec. 31, 2025. Under prior versions of the model, ILUC added substantial emissions to many crop-based fuel pathways. Depending on the specific pathway, ILUC values were commonly in the range of around 13 to 14 grams of carbon dioxide equivalent per megajoule (gCO₂e/MJ) for soybean-based pathways and roughly 17-18 gCO₂e/MJ for canola-based pathways. Removing these ILUC emissions lowers the baseline CI scores for many domestically produced crop-based fuels, making it easier for qualifying producers to achieve lower emissions rates and potentially claim a larger Section 45Z Clean Fuel Production Tax Credit.
Expanded Fuel Pathways and Facility-Specific Modeling
The updated 45Z GREET Model expands and refines feedstock and fuel production pathways for renewable diesel, sustainable aviation fuel (SAF), ethanol, biodiesel, renewable natural gas (RNG), and other qualifying clean fuels. It also revises how hydrogen is modeled by requiring users to model it directly within the 45Z GREET framework before using it as a process fuel in other pathways, replacing the previous reliance on Section 45V framework, while allowing hydrogen to be evaluated as either a transportation fuel or a process fuel. DOE also refined pathway-specific assumptions, including new moisture content inputs for corn stover gasification, additional pretreatment options for corn stover ethanol, and updated terminology for Coal Mine Methane (CMM) upgrading. Together, these changes allow lifecycle greenhouse gas emissions of qualifying fuels to be calculated using additional facility-specific inputs, while continuing to rely on standardized assumptions for many background processes.
Enhanced Lifecycle Data and Carbon Capture Methodology
The updated 45Z GREET incorporates the R&D GREET 2025 Rev. database, updating the underlying lifecycle emissions data, emissions factors, and process assumptions used throughout the model. In addition, DOE expanded carbon capture and sequestration (CCS) methodologies across several fuel pathways, allowing qualifying producers to more accurately account for emissions reductions achieved through carbon capture, utilization, and sequestration. The model also separates behind-the-meter electricity into integrated onsite generation and electricity supported through Energy Attribute Certificates (EACs). This allows for facilities to more accurately represent their electricity sources when calculating lifecycle emissions. Collectively, these enhancements improve the precision of lifecycle greenhouse gas calculations while reducing reliance on generalized industry assumptions.
Dual-Year Results Generation and North American Sourcing Limits
The updated software now generates separate lifecycle emissions results for fuels produced during calendar year 2025 and for fuels produced after Dec. 31, 2025. This distinction reflects the differing statutory requirements established by the OBBBA and allows producers to evaluate projects under both regulatory frameworks within the same model.
The update also introduces strong geographic sourcing restrictions to protect domestic supply lines. Feedstocks derived from outside the United States, Mexico, and Canada are barred from generating clean fuel tax credits. This geographic sourcing restriction introduces immediate compliance pressures, requiring robust documentation and traceability from suppliers.
Major Overhaul to Renewable Natural Gas (RNG) Rules
The Renewable Natural Gas (RNG) sector faces significant changes. For fuels produced after Dec. 31, 2025, the updated methodology generally no longer allows negative carbon intensity values to be claimed for certain non-manure-derived process fuels used in qualifying fuel production, including many landfill gas and other non-manure biogas pathways. The model also eliminates the generic “Animal Manure” anaerobic digestion pathway, requiring producers seeking credits for manure-derived RNG to establish species-specific manure pathways to determine eligibility and applicable CI values.
Outlook for Fuel Producers and Credit Buyers
Collectively, the June 2026 revisions implement significant legislative changes under OBBBA while improving DOE’s lifecycle modeling methodology. Because the Section 45Z Clean Fuel Production Tax Credit is directly tied to a fuel’s lifecycle greenhouse gas emissions, lower carbon intensity scores generally increase the amount of available tax credits for qualifying fuels. The removal of ILUC emissions from many crop-based pathways, expanded facility-specific modeling capabilities, updated lifecycle emissions data, and enhanced carbon accounting methodologies may allow eligible producers to achieve lower carbon intensity scores than under previous versions of the model. At the same time, the new statutory requirements for feedstock sourcing, RNG pathways, and post-2025 eligibility standards make accurate facility-specific modeling and robust documentation increasingly important for substantiating credit claims.
For more information, reach out to Vice President of Renewables and Legal Counsel Faith Larson at faith@mickco.com or 605-977-4873 ext. 4, or one of our team members if you are interested in learning more about tax credit transfers.
Your organization should seek independent legal, tax, and accounting advice as part of this process. Mickelson & Company is not providing legal or accounting services.