Capital is not ideological. It goes where it can be deployed at acceptable risk and returned at acceptable yield. Since the One Big Beautiful Budget Act reduced the 45Z SAF credit from $1.75 to $1.00 per gallon in July 2025, three distinct capital flows have emerged in the SAF sector: one advancing, one retreating, and one redirecting toward a different continent.

This is Issue 2 of The 45Z Reckoning. Issue 1 established that at $1.00 per gallon, 45Z functions as a HEFA preservation policy rather than a technology-neutral SAF incentive. Issue 2 follows what that policy reality has actually done to investment decisions.

HEFA’s Advance: Waste Feedstocks and Stacked Incentives Are Closing Deals

On April 20, 2026, Calumet Specialty Products closed a $150 million private placement of senior notes to fund the MaxSAF 150 expansion at Montana Renewables. The facility targets 120 to 150 million gallons per year of SAF at low capital cost per gallon. H1 2026 startup is on track.

The capital stack behind Montana Renewables is substantial. A $1.44 billion DOE loan backs MaxSAF 150. In March 2026, Calumet completed a $157.5 million offering of 9.75% senior unsecured notes maturing in 2031. A partnership with World Energy, announced in February 2026, locks in 70 million or more gallons of SAF delivery over three years.

What makes HEFA viable at $1.00 per gallon is the incentive stack that surrounds it. California’s Low Carbon Fuel Standard adds approximately $2.14 per gallon for used cooking oil HEFA on top of 45Z. HEFA does not require a bet on novel technology at commercial scale; it requires optimizing a process that is already working. That combination of stacked incentives and de-risked operations is what institutional capital is looking for.

The competitive position of waste-feedstock HEFA has further strengthened since Iran’s Hormuz blockade began in late February 2026. Domestic production insulated from Middle East supply disruption now carries a premium that was not part of the underwriting model 18 months ago.

ATJ’s Retreat: Reading the Gevo Withdrawal

Around April 1, 2026, Gevo announced it was shelving Net-Zero 1 — its ATJ-60 project planned for Lake Preston, South Dakota — and redirecting focus to its Gevo North Dakota (GND) facility in Richardton, where it planned to double ATJ-30 capacity. Then, on April 15, 2026, one day before the application deadline, Gevo withdrew its DOE loan guarantee application — an attempt to redirect the original Net-Zero 1 conditional commitment to the ATJ-30 project at GND. The withdrawal was triggered by a policy condition: the DOE, now operating as the Office of Energy Dominance Financing, required the project to support enhanced oil recovery. Gevo stated that EOR was not commercially viable at the site. GEVO stock fell approximately 10% on the day, reaching an intraday trough of negative 16.6% and erasing approximately $79 million in market capitalization at the trough.

Gevo’s April 15 withdrawal is the most visible evidence of ATJ’s structural financing problem in 2026. The government financing path for new large-scale ATJ capacity has become unavailable on acceptable terms, and no private substitute at equivalent scale has materialized.

Gevo targets alternative private financing for GND by end of 2026.

Net-Zero 1 was conceived under $1.75 per gallon in federal support. At $1.00, the economics narrowed. Losing the DOE financing path for GND removes the backstop that made the scale-up conceivable. LanzaJet’s Freedom Pines in Soperton, Georgia, remains the only operating US ATJ plant, at approximately 10 million gallons per year total capacity (SAF and renewable diesel combined). It is not expanding in 2026. The picture across ATJ is consolidation around existing assets, not investment in new capacity.

PtL’s Transatlantic Pivot: Following the Mandates

On April 9, 2026, Infinium’s Project Atlas won the SABA next-generation eSAF procurement, beating more than 12 competing projects. The facility targets 100,000 metric tons per year of eSAF with a 95% carbon intensity reduction. American Airlines handles physical delivery and logistics; corporate buyers claim Scope 3 reductions through book-and-claim.

What distinguishes Project Atlas is its explicit dual-market design. The facility is structured to produce EU-compliant RFNBO eSAF, serving ReFuelEU aviation mandates alongside the SABA voluntary procurement. Infinium is building to serve two demand signals simultaneously: US voluntary demand through American Airlines, and EU regulatory demand through ReFuelEU.

This architecture is becoming the template for PtL projects with serious financing ambitions. Metafuels is building toward Rotterdam, where ReFuelEU demand is structural. Twelve’s Moses Lake, Washington facility has locked in offtake with IAG (British Airways’ parent) and Alaska Airlines, both with significant EU route exposure. PtL capital is increasingly transatlantic because that is where mandate-backed demand lives.

The 45Z credit at $1.00 per gallon is not the primary driver for these projects. PtL economics are not yet competitive enough for the subsidy alone to close the financing gap. What closes the gap is SABA voluntary premiums combined with EU mandate compliance value. The 45Z rate is almost beside the point for PtL developers building transatlantic demand coverage.

Hormuz as the New Variable

Jet fuel reached $4.88 per gallon ($205 per barrel) on April 2, 2026. On a single Monday in April, 7,049 flights were canceled globally, 6.7% of scheduled operations. IATA has indicated recovery will take months even after a ceasefire.

Domestic HEFA production using waste feedstocks is not exposed to Middle East supply disruption. That fact now carries financial weight in airline procurement conversations and investor underwriting models that it did not carry before February 2026. Airlines cutting routes and raising fares are simultaneously under pressure to demonstrate climate commitments and to secure fuel supply chains that do not run through the Persian Gulf. HEFA from domestic waste feedstocks addresses both pressures at once.

The blockade has not simply raised jet fuel prices; it has changed the framework within which energy security arguments are evaluated. Arguments that previously required elaboration are now self-evident in airline boardrooms.

What the Capital Flows Signal

The pattern that has emerged since July 2025 is legible. HEFA with waste feedstocks is advancing because its economics work at $1.00 per gallon with the LCFS stack and the Hormuz energy security premium. ATJ is consolidating around existing assets because the government financing path for new large-scale capacity has become unavailable on acceptable terms. PtL is orienting toward European mandates because that is where the guaranteed demand lives.

The question for the next 12 months: can private capital at scale substitute for the government financing ATJ has lost? If it does, the sorting effect of 45Z may prove temporary. If it does not, the US SAF industry entering 2027 will look materially more like a HEFA industry than 45Z’s original designers intended.

Key Takeaways

• Calumet closed a $150 million note on April 20 to fund MaxSAF 150, adding to a capital stack that includes a $1.44 billion DOE loan, a $157.5 million March 2026 note, and a World Energy volume agreement. HEFA with waste feedstocks is the primary beneficiary of 45Z at $1.00 per gallon.
• Net-Zero 1 (Lake Preston, South Dakota) was shelved around April 1. On April 15, Gevo then withdrew its DOE loan guarantee application — an attempt to redirect the original Net-Zero 1 conditional commitment to the ATJ-30 project at Gevo North Dakota (GND) in Richardton — after the DOE required the project to support enhanced oil recovery. GEVO fell approximately 10% (intraday trough: -16.6%). Gevo targets private financing for GND by end of 2026.
• Infinium’s Project Atlas won the SABA procurement with a dual-market design: US voluntary demand through American Airlines book-and-claim, and EU mandatory demand through RFNBO compliance. PtL capital is flowing transatlantic because that is where mandates create guaranteed offtake.
• Iran’s Hormuz blockade has added energy security as an explicit investment criterion for domestic SAF production. Domestic waste-feedstock HEFA, insulated from Middle East supply disruption, is now valued on grounds that were not in the original 45Z underwriting model.
• The central question for 2026-2027: can private capital at scale substitute for the government financing ATJ has lost? If not, the US SAF industry entering 2027 will look materially more like a HEFA industry than 45Z’s architects intended.

Correction (April 27, 2026): An earlier version of this article incorrectly stated that Gevo withdrew its DOE loan guarantee application for the Net-Zero 1 project on April 15, and that this withdrawal caused Net-Zero 1 to be shelved. In fact, Net-Zero 1 (Lake Preston, South Dakota, ATJ-60) was shelved around April 1, 2026, when Gevo announced it would redirect focus to its Gevo North Dakota (GND) facility. The April 15 DOE withdrawal involved an application to redirect the original Net-Zero 1 conditional commitment to the ATJ-30 project at GND in Richardton, North Dakota — that application fell through when the DOE required enhanced oil recovery support. The article has also been corrected to reflect that Gevo stock’s closing decline on April 15 was approximately 10%; the 16.6% figure referenced the intraday trough, not the closing price.

Sources: Calumet senior note placement (Yahoo Finance, April 20, 2026); Gevo DOE withdrawal (StockTitan, April 15, 2026); Infinium/SABA procurement (PR Newswire, April 9, 2026); FTN News jet fuel shortage analysis (April 2026).

Sources:

1. Calumet Specialty Products. $150M senior note private placement. Yahoo Finance, April 20, 2026.
2. Gevo, Inc. Withdrawal of DOE loan guarantee application. StockTitan / press release, April 15, 2026. investors.gevo.com
3. Infinium / SABA. Project Atlas next-generation SAF procurement award. PR Newswire, April 9, 2026.
4. FTN News. Jet Fuel Shortage 2026: Which Airports Are Affected. April 2026.
5. Calumet / Simply Wall St. MaxSAF 150 expansion status and March 2026 notes offering. March 2026.
6. World Energy / Montana Renewables partnership. February 2026.