About This Tool

Clean Fuel Incentive Calculator

Purpose:

This Clean Fuel Incentive Calculator is designed to estimate the total incentives available for biofuels under various low-carbon fuel policies from the perspective of a U.S. producer. It helps users evaluate potential incentives under programs such as California LCFS, Oregon CFP, Washington CFS, British Columbia LCFS, and Canada CFR.

Why It Was Developed:

• • • • To simplify incentive calculations for biofuel producers
      • To provide a structured comparison of incentives across North American Clean Fuels Programs
      • To support decision-making for fuel producers

How to Use This Tool

1. Input Required Fields:

• • • • Compliance Year: Select the year for which incentives should be calculated.
      • Fuel Type: Choose the appropriate fuel type (e.g., Biodiesel).
      • Feedstock Type: Select the feedstock used for fuel production.
      • 20% Feedstock Limitation (California LCFS): Choose whether to apply the limitation for biofuel produced from virgin soybean, canola, or sunflower oils.
      • Fuel CI (Carbon Intensity): Input the fuel’s carbon intensity value in gCO₂e/MJ.
      • Credit Prices & RIN Prices: Provide market values for credit and RIN prices.
      • Blender’s Tax Credit (BTC)/45Z Applicability: Choose whether to apply the 45Z tax credit.
      • CI Input for 45Z Emission Factor: Input the emission factor.

2. Understanding the Output:

• • • • CFS Incentive: Estimated incentive from each program based on the provided inputs.
      • RIN Incentive: The value of RINs based on the input price.
      • 45Z Credit: The incentive amount based on the eligibility of the 45Z tax credit. The proposed Section 45Z has been extended through 2029 with stricter eligibility and lifecycle rules. The SAF credit value has been reduced compared to earlier levels (from 0.35/gal or $1.75/gal to 0.20/gal or $1.00/gal for fuel produced after December 31, 2025), which could affect higher cost aviation fuel pathways. The rules also clarify how sales through intermediaries are treated, reducing transaction risk for producers.
      • Stacked Incentive: The combined incentives from other programs.
      • Total Incentive: The sum of all applicable incentives.

Considerations

• • • • The tool does not account for transportation costs related to fuel supply.
      • Credit and RIN prices fluctuate, so users must update them regularly for accurate results.
      • Currently the calculator considers 2025 and 2026 years only (which includes the difference in value for SAF under 45z in both years).

Notes

• • • • From the perspective of a U.S. producer, the transition from the Blender’s Tax Credit (BTC), which expired in 2024, to the Section 45Z Clean Fuel Production Credit marks a fundamental shift in how incentives are structured and captured across the value chain. BTC operated as a fixed, volume-based incentive at the blending stage, offering predictable support regardless of lifecycle emissions and often distributing value across blenders and downstream participants. In contrast, 45Z, effective from 2025, moves the incentive upstream to the producer level and ties credit value directly to the carbon intensity (CI) of the fuel, thereby rewarding lower-emission pathways.
      • Unlike under the Renewable Fuel Standard (RFS), where foreign producers and importers can generate Renewable Identification Numbers (RINs), 45Z benefits are restricted to domestic production. As a result, foreign importers do not receive 45Z credits, although they can still generate and monetize RINs. Current policy signals indicate that importers can continue to generate full RIN value through 2027; however, under the proposed “Set 2” rule, it is noted that imported fuels may receive reduced RIN value starting 2028, but the information on the same will be communicated to stakeholders by EPA.
      • Feedstock eligibility becomes a critical factor under 45Z from 2026 onward, when fuels must be derived from feedstocks grown or produced in the U.S., Canada, or Mexico. This requirement, introduced through subsequent legislative updates, directly limits the use of imported feedstocks and may disproportionately impact pathways reliant on international supply chains.
      • 45Z also includes explicit anti-stacking provisions. A facility cannot claim the 45Z credit in a taxable year if it is also claiming certain other federal energy credits for the same facility, including: Section 45V (clean hydrogen production), Section 45Q (carbon capture and sequestration), and Section 48(a)(15) (hydrogen investment credit).
      • In British Columbia allow stacking of incentives, where producers can benefit simultaneously from the provincial Low Carbon Fuel Standard (LCFS) and federal Clean Fuel Regulations (CFR).