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DOE and USDA release key models for Clean Fuels Production Credit calculations

Clean Fuels Alliance America welcomes new guidance, emphasizes importance for industry growth.

Corn Ethanol Display Pixabay
Pixabay

Clean Fuels Alliance America has welcomed the Department of Energy's release of the 45ZCF-GREET model, a crucial tool for calculating carbon intensity scores and associated values for the §45Z Clean Fuels Production Credit. Simultaneously, the USDA has issued an Interim Rule on Technical Guidelines for Climate-Smart Agriculture Crops Used as Biofuel Feedstocks, along with a beta version Feedstock Carbon Intensity Calculator.

The 45ZCF-GREET model and its accompanying documentation provide essential clarity for producers on credit calculation methods, enabling them to incorporate these values into fuel sales and feedstock contract negotiations. However, the Climate Smart Ag model introduced by USDA requires further development and cannot currently be factored into the §45Z credit value.

Kurt Kovarik, Clean Fuels Vice President of Federal Affairs, commented on the developments: "We appreciate Treasury, USDA, and the Department of Energy issuing these long-awaited rules and models. We also thank the many Members of Congress who urged the Administration to publish this guidance as soon as possible."

Highlighting the significance of the biodiesel and renewable diesel industries, Kovarik noted that they collectively meet 9% of U.S. demand for distillate fuel in heavy-duty transportation. He emphasized the critical nature of these rules for the industry's growth, which is vital to both the agricultural sector and U.S. energy security.

"We will continue to work with our members to evaluate whether today's releases provide clean fuel producers the policy certainty they need to negotiate feedstock and fuel offtake agreements, and ultimately grow the production and market for biomass-based diesel," Kovarik added.

Regarding the USDA's rule, Kovarik expressed optimism about its potential to enable American farmers and biofuel producers to calculate the carbon benefits of conservation practices. He stated, "We look forward to continued work with USDA, Treasury and the Department of Energy to ensure that farmers can financially benefit by adopting these practices and cooperate with clean fuel producers to increase the value of domestically produced clean fuels."

This development marks a significant step in the ongoing efforts to promote and expand clean fuel production in the United States, with potential far-reaching implications for the agricultural and energy sectors.

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