Key Takeaways

• The Trump administration’s updated GREET model reflects changes to the Clean Fuel Production Tax Credit (45Z), removing indirect land-use change penalties.
• Biofuel industry leaders praise the model for enhancing domestic energy production and supporting rural economies.
• The model helps U.S. producers calculate carbon intensity, vital for maximizing benefits under the 45Z credit.

Update on the GREET Model

The Trump administration has issued a significant update to its GREET model, a critical tool for the biofuel industry to assess the value of the Clean Fuel Production Tax Credit, commonly referred to as 45Z. Released by the Energy Department, this revised model incorporates changes from the One Big Beautiful Bill Act, notably eliminating indirect land-use change penalties for U.S. renewable fuels. The modification has been met with widespread approval from biofuel advocates.

Producers expressed concerns regarding the timing of the update. Delays could have prevented some companies from claiming the tax credit in the current fiscal year. Kurt Kovarik, vice president of federal affairs at Clean Fuels Alliance America, emphasized that this increased clarity is essential for the industry, promoting domestic energy generation and creating opportunities for farmers—two priorities that are increasingly vital.

The new GREET model reflects recent federal biofuel policies that have emerged as a beacon for struggling grain and oilseed farmers. Emily Skor, CEO of Growth Energy, a prominent ethanol trade organization, noted that the revised credit has the potential to enhance farm income and open new markets for American manufacturing.

The update not only discards the indirect land-use change policy but also affirms the eligibility of undenatured fuel ethanol for export. Skor asserted, “The new model marks an important step toward building a regulatory regime that unleashes the full potential of 45Z.” She expressed appreciation for the Department of Energy’s efforts and looked forward to collaboration with Treasury and USDA to finalize regulations that could benefit American farmers and ethanol producers.

GREET, an acronym for Greenhouse gases, Regulated Emissions, and Energy use in Technologies, is a fundamental framework for assessing the environmental impact of fuels from the farm to the consumer. It allows producers to determine lifecycle emissions, or carbon intensity, crucial for evaluating the 45Z credit’s value. Many U.S. corn-based ethanol producers are striving to reduce their carbon emissions to fully leverage 45Z and similar incentives provided in states like California.

Geoff Cooper, CEO of the Renewable Fuels Association, described the update as critically important for the ethanol sector, influencing operational and investment decisions as it pertains to implementing the 45Z Clean Fuel Production Credit. He anticipates a thorough review of the new model and its implications for industry members.

The update has also been praised by Monte Shaw, executive director of the Iowa Renewable Fuels Association. He believes the changes better represent the role of U.S. biofuels in emission reduction and support for rural economies, distancing itself from unscientific assumptions concerning biofuels and highlighting their genuine carbon benefits.

This updated GREET model aims to strengthen the biofuel sector, aligning closely with national goals for energy independence and economic growth in rural areas.

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