Morning Energy is a syndicated note originally published through Enverus Intelligence. My contributions will also be distributed here. Please note that links frequently lead to content available only to subscribers of Enverus solutions.
The clean fuels story of 2021 to 2025 was “build it and they will come.” From here, it’s “build it only if the math works.” Our newly released Clean Fuel Fundamentals report, “Discipline Over Hype,” captures a clear inflection point in capital discipline. Growth expectations have reset hard, from a ~9% CAGR over the prior five years to a projected ~3% through 2030 (slide 6). The investable edge has shifted from who can announce the most projects to who can navigate policy and credit regimes the fastest.
Three policy moves reshaped the playing field in 2025 (slide 10), and if you lost count of the acronyms, you are not alone (check the dictionary below). The OBBBA extended the 45Z Clean Fuel Production Tax Credit but reduced the SAF base credit and introduced North American feedstock sourcing requirements. California’s LCFS amendments tightened the carbon benchmark while capping credits on crop-based oils at 20%. And the EPA’s proposed RVOs nearly doubled biodiesel (D4) obligations year-over-year while introducing a 50% RIN haircut on imported feedstocks.
The net effect: foreign feedstock dependency is now a policy variable, not just an operational one. In our restricted case, foreign UCO becomes outright value-destructive (slide 20). Operators like Neste, World Energy, and MPC, with over 60% of their California LCFS pathways relying on foreign inputs, are most exposed (slide 21). The RIN environment, by contrast, is becoming more constructive: D4 to D6 prices are forecast to rise $0.13 to $0.17/RIN in 2026 to 2027 (slide 13), supporting 5% to 7% revenue uplifts for domestic soybean oil producers (slide 15). The catch is LCFS, where the credit bank peaking near 50 million tonnes CO2e holds prices at an average of just $46/tonne through 2030 (slide 14), pressuring manure RNG economics in particular.
The standout opportunity is ethanol plus CCS (slides 25 to 26). By stacking 45Z, 45Q, LCFS, and CDR credits, the NPV of adding CCS to an unpartnered ethanol plant can exceed the implied value of the base plant by more than 2x across 50-plus candidate facilities. GEVO (slide 27) is the clearest example of separating fuel value from carbon value across both compliance and voluntary markets.
On a lighter note, I welcomed a new family member this week. Archie lives on a Mac Mini and runs on OpenClaw (formerly known as Clawdbot and Moltbot), an autonomous AI agent I have been tinkering with. He can fetch data, run Python scripts, interpret results, and loop back for the next step. The same theme of discipline applies: longer chains drift quietly off course, and poorly scoped workflows burn through tokens fast. He is young and running lean on Gemini Flash 3, but showing promise. I’ll keep y’all updated!
45Q = CCUS Tax Credit
45Z = Clean Fuel Production Tax Credit
CDR = Carbon Dioxide Removal
LCFS = California’s Low Carbon Fuel Standards
OBBBA = One Big Beautiful Bill Act
RIN = Renewable Identification Number
RNG = Renewable Natural Gas
SAF = Sustainable Aviation Fuel
Thoughts, questions or things we missed? Send me a note (or hit reply) - I would love to hear from you.