The Department of Energy released the updated 45ZCF-GREET carbon-intensity model on June 12, 2026, the long-awaited piece of 45Z certainty US biofuel and SAF producers had been waiting on. The harder analytical question is what the new model, together with the OBBBA statutory changes it operationalizes, actually does to per-gallon SAF economics.

Three facts shape the answer. OBBBA cut the SAF maximum credit by 43 percent, from $1.75 per gallon to $1.00. The model now strips indirect land-use change penalties off crop-based pathways, an adjustment worth roughly half the $1.00 cap for soy biodiesel and corn ethanol-equivalent SAF routes, while waste-derived HEFA gains nothing because it had no material ILUC component to remove. And Treasury’s proposed rule requires producers to use the model version in effect on the first day of the taxpayer’s taxable year of production, meaning every DOE update reshuffles in-flight inventory economics. The net effect is a pathway-by-pathway reshuffle, not the broad uplift the headline framing implies. The “long-awaited 45Z certainty” framing the trade press has applied to the June 12 release is correct on procedural grounds and substantially incomplete on economic ones.

Why the SAF Maximum Was Cut From $1.75 to $1.00 Per Gallon

The central economic act of the One Big Beautiful Bill Act (P.L. 119-21, signed July 4, 2025) for SAF producers is not the ILUC removal or the feedstock restriction. It is the $0.75-per-gallon cut to the maximum credit value, effective for fuel produced after December 31, 2025.

Pre-OBBBA Section 45Z paid up to $1.00 per gallon for non-SAF clean fuels and up to $1.75 per gallon for SAF, both at the prevailing-wage-and-apprenticeship bonus (a 20-cent and 35-cent base, respectively). OBBBA eliminated the SAF special rate of 35 cents per gallon. SAF now defaults to the same 20-cent base used by every other clean fuel, so the SAF and non-SAF maximums both top out at $1.00 per gallon at the PWA bonus. The Clean Air Task Force characterized the change as expanding 45Z for conventional biofuels while cutting it for SAF. The numerical reduction, $1.75 to $1.00, is a 43 percent cut.

For a 100-million-gallon-per-year HEFA plant operating at the SAF maximum, the structural delta is up to $75 million per year of credit value lost between the 2025 financing case and the 2026-onward reality. Real per-gallon credit scales with the carbon-intensity score, so the realized delta for a plant scoring 20 to 30 kg CO2e per mmBTU is closer to $30 to $45 million per year. Either way, every US SAF plant currently being engineered or restarted is now economically priced against a credit that is materially smaller than the one shown in 2024 and early-2025 project finance models. The statute also extended Section 45Z through December 31, 2029 (from December 31, 2027), so the cut is applied across a longer eligible production window.

The OBBBA SAF maximum is $1.00 per gallon, not $1.75. Every US SAF plant currently being engineered carries a $0.75-per-gallon structural credit cut versus the 2025-era financing case.

What ILUC Removal Is Actually Worth, Pathway by Pathway

OBBBA directed Treasury to strip indirect land-use change emissions from the Section 45Z calculation, and the June 12 GREET update operationalizes that change for fuel produced after December 31, 2025. The mechanical impact varies dramatically by pathway.

For crop-based feedstocks, the Clean Air Task Force quantifies the strip-out at up to 20 to 25 gCO2e per MJ on conventional biofuels like corn ethanol and soy biodiesel. Soy-oil HEFA, corn-ethanol alcohol-to-jet, and canola-based SAF pathways carry comparable land-use components and see CI reductions of similar order of magnitude. Under the Section 45Z formula (emissions factor equals (50 minus emissions rate) divided by 50, with both numbers denominated in kg CO2e per mmBTU), a 25 gCO2e per MJ CI drop converts to roughly 26 kg per mmBTU. That changes the dimensionless emissions factor by 0.53, which at the $1.00 SAF cap translates to roughly 53 cents per gallon of additional credit value. For crop pathways that previously sat above the 50 kg per mmBTU threshold and earned no credit at all, the same ILUC removal flips them from disqualified to qualifying. The change is not marginal. It is the difference between a no-credit crop pathway and a meaningfully credited one.

Waste-derived HEFA gains nothing. Used cooking oil and tallow had no material ILUC component in the original model because they are not crop-routed feedstocks. The pathways that constitute the majority of current US HEFA production (Calumet Montana Renewables, Diamond Green Diesel) see no per-gallon benefit from the ILUC removal. World Energy’s Paramount facility, the historical third leg of the US HEFA-SAF stool, has been idled since early 2025.

eSAF (power-to-liquid) similarly gains nothing. Captured-CO2 plus renewable-electricity hydrogen pathways carry near-zero or negative CI on the input side. Twelve’s AirPlant One, which opened in Moses Lake on June 11, sits in this category.

The net effect is counterintuitive. The pathways OBBBA otherwise economically hurts (crop-based) gain something back from the model change, and the value of that giveback is not trivial. The pathways most US SAF production currently runs on (waste-derived HEFA, PtL) get nothing from the ILUC removal and absorb the full $0.75 SAF rate cut. The model change favors the pathway class furthest from current commercial scale.

How the North American Feedstock Restriction Reshapes HEFA Economics

OBBBA restricts qualifying feedstocks for post-2025 fuel to those produced or grown in the United States, Canada, or Mexico. The 45ZCF-GREET update aligns to that statutory requirement. For UCO HEFA, this is the larger economic event than the ILUC math.

Imported UCO becomes ineligible for 45Z credit attachment on fuel produced from January 1, 2026 onward. Fastmarkets puts 2024 domestic US UCO collection at roughly 3.3 billion pounds per year, well below what US HEFA capacity can absorb at full utilization. The marginal HEFA gallon, once domestic UCO is exhausted, pushes onto domestic soy oil. Soy oil carries a higher carbon-intensity score than UCO even after the ILUC removal.

The system effect is that per-gallon credit value for the average US HEFA gallon may go down even where per-pathway CI improves. A Calumet or Diamond Green Diesel plant operating on a UCO-heavy blend in 2025 economics may shift toward a soy-heavy blend in 2026 economics, and the weighted-average credit per gallon shifts accordingly. The plant-level financing case depends on the feedstock contract mix, not just the model CI score.

What the Model-Version-at-Production Rule Means for Project Finance

Treasury’s proposed Section 45Z regulations (REG-121244-23, published in the Federal Register on February 4, 2026) require producers to use the version of the 45ZCF-GREET model in effect on the first day of the taxpayer’s taxable year of production. Industry submissions had asked Treasury to lock the model to the version in effect when the facility began construction, providing financing-case certainty. Treasury rejected that request in the proposed rule.

The mechanical implication is that every DOE update to 45ZCF-GREET reshuffles economics for in-flight inventory. The June 12, 2026 release is the first comprehensive model release codifying the OBBBA changes; Treasury interim guidance had already directed taxpayers to use 45ZCF-GREET with ILUC zeroed for 2025 production, but the new release is the bankable version of that framework. Producers cannot lock 45Z accruals to a fixed model state.

This is the embedded carbon-intensity-methodology risk that sits inside every US SAF project finance package. It is one reason the February 12, 2026 SkyNRG/KLM Delfzijl close matters as a contrast. European mandate-backed SAF revenue does not carry equivalent methodology-update risk because ReFuelEU pathway eligibility is governed by RED III delegated acts and default value tables that are updated on a less frequent, more legally formal cadence than periodic DOE model pushes.

Why the Treasury Proposed Rule Is Still the Load-Bearing Document

Producers can run CI calculations under the June 12 model today. Whether those outputs survive at locked values is the open question. The proposed rule is in effect for calculation purposes, but the public hearing on REG-121244-23 was held May 27-29, 2026, and the final rule has not yet issued. Applicability-date language in the final rule will determine whether 2025 and 2026 returns filed under proposed-rule terms are subject to revision.

The other missing piece is the USDA Feedstock Carbon Intensity Calculator (FD-CIC), still in beta release as of June 2026. FD-CIC is the tool that quantifies the CI benefit of Climate-Smart Agriculture practices on corn, soybeans, and sorghum, and is supposed to feed into 45ZCF-GREET as a feedstock input. Until FD-CIC is finalized and Treasury issues guidance on integrating it into 45Z, climate-smart agriculture credit-stack benefits are stuck in mass-balance interim arrangements.

The framework will not be fully bankable until both pieces land. Producers running CI calculations under the sanctioned June 12 model can support current-tax-year returns, but the cash-flow conversion case for the next set of US SAF FIDs depends on Treasury final guidance and the USDA practices calculator settling.

The Two Scientific Critiques That Are Not Going Away

OBBBA’s ILUC strip-out is statutorily binding for 45Z purposes. It is also scientifically contested. The International Council on Clean Transportation, in a March 2026 analysis, characterized the change as posing “a large risk of over-crediting fuels in the United States, or worse yet, incentivizing fuels that may be doing more harm than good.” The Clean Air Task Force has consistently described ILUC inclusion as a critical environmental-integrity guardrail in 45Z scoring, and has flagged its statutory removal as the weakening of the credit’s most important scientific check on crop-based pathways.

These critiques will not change the statute. They may, however, change how international counterparties read US-origin SAF carbon-intensity claims. CORSIA’s life-cycle assessment methodology still includes induced land-use change. The European Union’s Renewable Energy Directive III pathway eligibility framework also includes ILUC considerations. The mismatch between the US methodology and the multilateral methodologies is a cross-recognition risk that does not show up in the per-gallon 45Z math but materially shapes which US SAF gallons can clear book-and-claim into European mandate-buyer hands.

Key Takeaways

• The OBBBA SAF maximum is $1.00 per gallon (down from $1.75), not the figure used in 2025-era project finance models. Every US SAF plant currently being engineered carries a $0.75-per-gallon structural credit cut versus its initial financing case.
• ILUC removal is worth roughly 53 cents per gallon at the SAF cap for crop-based pathways (corn ATJ, soy HEFA), zero for waste-derived HEFA, and zero for eSAF. For some crop pathways previously above the 50 kg per mmBTU CI threshold, ILUC removal is what flips them from disqualified to credit-earning.
• The North American feedstock restriction is the bigger UCO HEFA event than the ILUC math. Imported UCO becomes ineligible for post-2025 fuel; domestic supply at roughly 3.3 billion pounds per year cannot absorb full US HEFA capacity. The marginal gallon shifts onto domestic soy oil at higher CI.
• Treasury rejected facility-vintage model lock. Producers must use the GREET version in effect on the first day of the taxpayer’s taxable year of production. Every DOE update reshuffles in-flight inventory economics, embedding a methodology-update risk inside every US SAF project finance package.
• The Treasury final rule (REG-121244-23) and the USDA Feedstock Carbon Intensity Calculator remain outstanding. Until both land, today’s GREET outputs support current-tax-year returns but are not fully bankable for next-FID cash-flow modeling.

Sources: Department of Energy GREET model page; REG-121244-23 (Federal Register, February 4, 2026); Clean Air Task Force (October 2025); International Council on Clean Transportation (March 2026); USDA FD-CIC page.