January 2024 Brown Bag Webinar Recap

Overview

How does life cycle assessment (LCA) shape eligibility, credit value, and compliance under North American climate policy?

In our January 2024 Brown Bag session, Lise Laurin, Founder and CEO of EarthShift Global, and Nathan, Director of Research, examined how life cycle greenhouse gas accounting underpins key regulatory programs, including IRS Sections 45Q and 45V in the United States and Canada’s Clean Fuel Regulation (CFR). The session explored how these policies rely on specific modeling tools, defined system boundaries, and structured documentation requirements to determine credit qualification and carbon intensity values.

Drawing on practical demonstrations of the required tools — including the 45V Hydrogen GREET model, NETL resources for 45Q, and Canada’s openLCA-based Fuel LCA Model — the webinar highlighted how methodological choices, allocation approaches, and data readiness directly influence both compliance outcomes and financial value.

This session remains one of our top-performing Brown Bag Webinars, so we’ve prepared a refreshed summary of key themes and an edited transcript in advance of our February 2026 Brown Bag Webinar, The Critical Role of Life Cycle Assessment in Securing the 45Q Tax Credit, presented by Mariana Ortega Ramirez and Nowell Stoddard on Thursday, February 19th, 2026 at 1PM EST.

Key Themes from the Webinar

• LCA as a regulatory requirement: Programs like 45Q, 45V, and Canada’s Clean Fuel Regulation require prescribed life cycle greenhouse gas modeling — not optional reporting.
• 45V hydrogen credit: Emissions intensity (well-to-gate) determines eligibility and credit value, using the required 45V Hydrogen GREET model.
• 45Q carbon capture credit: Credit value depends on cradle-to-gate emissions compared to a market baseline, with review requirements for the LCA.
• Canada’s Clean Fuel Regulation (CFR): Fuel carbon intensity is calculated across the full life cycle (g CO?e/MJ) using the openLCA-based Fuel LCA Model.
• Methodological choices matter: Allocation approach, system boundaries, and treatment of co-products can significantly affect results.
• Tool variability across jurisdictions: Different policies require different models, assumptions, and documentation formats.
• Early screening is valuable: Preliminary estimation tools can help assess feasibility before investing in a full regulatory-compliant LCA.

About the Speakers

Lise Laurin is Founder and CEO of EarthShift Global. With decades of experience in life cycle assessment and sustainability strategy, she has worked extensively at the intersection of LCA methodology, policy, and practical implementation across industry sectors.

Nathan is Director of Research at EarthShift Global. He specializes in life cycle modeling, regulatory carbon accounting, and fuel pathway assessment, with experience supporting clients navigating evolving climate and energy policy frameworks in both the United States and Canada.

Edited Transcript

0:00 Introduction

Sam: Hello and welcome, everyone, to today’s webinar, Use of LCA in North American Policy. I am your host, Sam Boduch, Account Manager here at EarthShift Global.

We are very fortunate today to be featuring two EarthShift Global leaders, including Lise Laurin, EarthShift Global’s Founder and CEO, and Nathan, EarthShift Global’s Director of Research.

Today’s webinar will discuss two North American policies: the Canadian Clean Fuel Standard and the U.S. Internal Revenue Service Sections 45Q and 45V, and how life cycle greenhouse gas accounting is a key aspect of both. This is sure to be both instructional and informative.

We will welcome Q&A using the Q&A feature at the bottom of your Zoom screen. Please feel free to submit questions as the presentation goes on.

Without further ado, I am excited to welcome Lise and Nathan.

Lise, please take it away.

Lise: Thank you so much, Sam.

As Sam said, I’m Lise Laurin, and I’m really pleased to present to you a deeper dive into IRS Sections 45Q and 45V. Nathan is going to cover the Clean Fuel Standard and what’s involved in that.

If you are here because you’re interested in North American LCA policy outside of these few regulations, this probably isn’t the webinar for you. However, if you’re interested in these regulations, then we’re going to go into them in some detail and even do a little bit of a hands-on walkthrough as well.

I want to start with the Inflation Reduction Act, which made changes to 45Q and introduced 45V.

In many ways, if you look at the Inflation Reduction Act, it didn’t have much to do with inflation reduction, but it had a lot to do with greenhouse gas reduction and moving us from where we are today to, hopefully, a lower-carbon future.

It provides investments in a range of areas, including alternative fuel — including aviation fuel — clean energy production and storage, hydrogen for industrial heat and transportation, carbon sequestration and reuse, alternative vehicles, and home energy efficiency.

Of those areas, the ones that are highlighted require a life cycle assessment — or more specifically, a life cycle greenhouse gas assessment — to show emissions rates in order to qualify for the credit.

It is a federal tax credit from the IRS.

We’re going to focus specifically on 45V and 45Q.

3:42 Section 45V – Clean Hydrogen Production Credit

Let’s start with Section 45V.

This has to do with the production of hydrogen. It applies to hydrogen that, from a well-to-gate perspective — meaning from raw material extraction through the production of the hydrogen — has a carbon footprint of less than 4 kilograms of CO?-equivalent per kilogram of hydrogen.

To put that into context, traditional steam methane reforming is on the order of 10 to 12 kilograms of CO?-equivalent per kilogram of hydrogen.

Depending on pathway and energy source, hydrogen production routes can be significantly lower than that. The lower the greenhouse gas emissions intensity, the higher the credit.

The regulation and guidance around the regulation were in public comment at the time of this webinar. That comment period closes February 26th, 2024 so there is some time pressure if you want to provide input.

There is credit available for up to 10 years of operation. The hydrogen must be produced in the United States. It requires external verification of your production amounts. However, it does not require a certification or critical review of the LCA itself.

If you have ever taken a 45Q credit for carbon sequestration or reuse, you cannot also take a 45V credit for the same carbon — they are mutually exclusive. However, you can take clean energy production credits for electricity, even if you use that electricity internally. 

The credit value depends on emissions intensity. If you are just below the 4 kg threshold, you receive approximately $0.12 per kilogram. If you meet additional labor and facility requirements, you can receive up to five times that. If your emissions are significantly lower, you can receive up to $3 per kilogram, which is substantial.

7:25 Required Modeling Tool – 45V Hydrogen GREET Model

In order to claim the credit, you must use the 45V Hydrogen GREET model. This model was developed by Argonne National Laboratory and is built on GREET. This is the required tool. You cannot substitute your own LCA model. One interesting aspect is that it may not always be the most current GREET model version available, but it is the one specified for the credit. You obviously cannot complete the calculation until the production year is finished, since you need your annual production totals.

The model requires inclusion of:

• Emissions associated with feedstock growth

• Hydrogen production

• Energy production

• Any carbon capture and sequestration

There is extensive documentation on how to use the tool. The tool itself is fairly fixed. You cannot make major modifications within it. For those familiar with LCA methodology, allocation in this model is primarily handled through system expansion.

The GREET pathways currently included in the tool are:

• Methane reforming

• Autothermal reforming (ATR)

• SMR and ATR using landfill gas

• Coal gasification

• Biomass gasification (corn stover and logging residue)

• Low-temperature electrolysis

• High-temperature electrolysis

If you have a different pathway, you must use the traditional GREET model and petition for a provisional emissions rate. Presumably, once a pathway is approved, it may later be incorporated into the official tool.

10:15 Demonstration of the 45V Tool

Let me briefly show you what the tool looks like. 

When you enter the user inputs tab, you’ll see the simulation year and the pathway options we just discussed.

You select the applicable pathway components. To save time, I’ve opened a pre-built example using low-temperature electrolysis.

In this example, I selected a New England grid mix, included an oxygen co-product, and set hydrogen production pressure.

The key result is displayed at the bottom: the kilograms of CO?-equivalent per kilogram of hydrogen.

If we switch to a biomass gasification pathway, you select that option, enter process details, input biomass quantities, electricity mix, natural gas inputs, carbon capture options, and hydrogen output.

If you select custom feedstock properties, you may notice that the tool takes time to process.

Each input takes a moment to update. It’s relatively straightforward, but it is somewhat slow.

Once configured properly, however, it provides the emissions intensity required for reporting.

13:22 Section 45Q – Carbon Capture, Utilization, and Storage Credit

In the case of 45Q, we are looking at having lower emissions than the market supply baseline.

One of the things you’ll have to do is determine what the market supply is, model it, and then make sure that your emissions are lower than that baseline.

Once you’ve determined that you are lower, you can use the CO? for a variety of purposes. It doesn’t necessarily matter what the end use is, as long as it qualifies under the regulation.

If you are using the CO? as an injectant in an enhanced oil or natural gas recovery project, there is a different credit value. There is also a different value if you are directly sequestering CO?, or if you are capturing it directly from the atmosphere rather than from a point source.

So, there is a higher value for direct sequestration and certain uses.

The credit is based on cradle-to-gate emissions minus the market supply baseline. That difference is what determines the credit value.

Unlike 45V, the LCA for 45Q must be reviewed. There is a requirement for a form of critical review.

Another important detail is that transport of the CO? to the next user is not included in the boundary. You are modeling to your own facility gate. It must be used, but the downstream transport is outside the scope.

15:00 45Q Modeling Tools

There are a number of tools available.

The National Energy Technology Laboratory (NETL) has created two tools. One of them is an Excel-based tool that you can use, often referred to as the CO2U tool. There is also an openLCA tool produced by NETL.

If you prefer working in openLCA, that may be your best option.

It is important to note that both of these tools are not designed exclusively for 45Q. Therefore, you need to read the documentation carefully to understand how to apply them correctly for this specific regulation.

We have also built a simple estimator tool that allows you to quickly estimate your potential credit value. This is intended as a screening tool to answer the question: “Is there enough potential value here to justify investing in a full LCA?”

Our estimator uses data from the NETL documentation and spreadsheets, as well as some GREET data. It is not intended for official submission. It is strictly for preliminary evaluation.

16:54 Demonstration – NETL Excel Tool

This is an example of the input page from the NETL Excel tool.

You will see that there is a main co-product. In the case of 45Q, your CO? is the main product you are entering.

Below that, you list other co-products. It is important to capture all of these because allocation is done by mass. The more co-products you have, the more the burden can be distributed, reducing the allocated impact to CO?.

Below that section, you enter your material and energy inputs, including electricity, fuels, water, and other inputs.

You also define your data boundary and confirm your units. Eventually, the tool calculates your carbon results.

It is a relatively robust tool for estimating impacts.

18:30 EarthShift 45Q Estimator Tool

Now let me show you the estimator tool we developed.

In this tool, the main product is already labeled as CO?. You enter the quantity produced and specify how much is biogenic.

You then list co-products, enter your material inputs, and select electricity sources from dropdown menus. You can also include other energy inputs, such as natural gas, as well as raw material transportation. On the left-hand side of the spreadsheet, impacts are allocated across the main product and co-products. On the right-hand side, impacts associated with purification and compression apply only to CO?.

The results appear on the right-hand side of the spreadsheet, including a rough estimate of potential dollar value.

Again, this is only a screening tool. It provides an early indication of whether pursuing the credit makes financial sense.

20:00 Philosophical Consideration

CO? is treated as a co-product in this framework. That means the impacts of manufacturing it must be included.

If a facility has very high emissions, it may not receive much credit and may decide it is not worth capturing.

Personally, I believe we should create incentives to capture as much CO? as possible. However, the regulation is structured around relative performance against a baseline.

I’m going to close my section here and turn this over to Nathan.

It looks like we already have a number of questions coming in, so hopefully we will have time to address them after Nathan’s presentation.

Thank you.

21:02 Section II – Canada’s Clean Fuel Regulation (CFR)

Nathan: Thank you, Lise.

I’m going to share my screen separately.

Thank you to everyone who has joined us. We’re excited to have you here.

We’ll now shift into something related but also quite different.

As government regulatory programs emerge, one of the realities we see is that there is no single modeling tool and no single approach for estimating life cycle greenhouse gas emissions and emissions reductions.

If you are a low-carbon or renewable fuel producer, you already know that as you enter different jurisdictions, you are asked to use different modeling tools, different assumptions, and different data.

So becoming comfortable with this emerging landscape is important.

Why EarthShift Is Speaking on the CFR?

There is a large team dedicated to the Clean Fuel Regulation at Environment and Climate Change Canada.

EarthShift Global was part of a consulting team that developed the initial life cycle greenhouse gas emissions models for Canadian fuels, which are now being used as part of the CFR program.

In recent years, we’ve worked with a number of clients navigating this space and have learned important lessons along the way.

Today, I’ll provide an overview of the Clean Fuel Regulation, demonstrate the Fuel LCA Model tool — which is very different from what Lise just showed — and explain how to calculate carbon intensity for a fuel and submit it under the CFR program.

23:36 Overview of the Clean Fuel Regulation

The Clean Fuel Regulation is legislation that includes:

• A regulatory requirement to reduce carbon intensity of fossil fuels over time.

• A credit market for low-carbon fuels.

• A life cycle-based modeling approach.

The objective is to gradually reduce the carbon intensity of fossil fuels produced and used in Canada and increase the supply of lower-carbon alternatives.

Canadian fossil fuel producers — particularly gasoline and diesel producers — are mandated to reduce the carbon intensity of their fuels over time.

The target is a 15% reduction by 2030 relative to 2016 levels.

The first year’s requirement was a reduction of 3.5 grams CO? per megajoule, with incremental reductions each year thereafter.

There is also a credit market where:

• Producers can generate credits through emissions reduction projects.

• Low-carbon fuel suppliers can generate credits by supplying lower-CI fuels.

• Compliance credits can also be generated through supplying energy to advanced vehicle technologies, including electric and hydrogen-powered vehicles.

There is an established credit and tracking system under the CFR. There is also a formal verification system based heavily on ISO LCA standards and critical review principles.

27:01 Fuel Pathways Under the CFR

So I just used the term “fuel pathway.” What does that mean under the CFR?

Here’s a visual representation.

The Clean Fuel Regulation takes a life cycle approach to estimating, tracking, and reducing the carbon intensity of Canadian fuels.

Under the CFR, carbon intensity is expressed in grams of CO?-equivalent per megajoule, based on high heating value, for the life cycle of a fuel.

That life cycle starts from feedstock production, then includes transportation, fuel production, fuel distribution, and finally fuel combustion.

So when we use the term “pathway,” we’re referring to all of those stages — from raw material extraction through to final combustion by the end user.

28:01 Default Carbon Intensity Values

Under the CFR legislation and within the modeling tool, a number of default carbon intensity values have already been generated by Environment and Climate Change Canada.

These defaults cover a range of existing fossil fuels, as well as activities involved in fuel life cycles — including fossil and low-carbon fuels.

Within the tool and legislation, you will find predetermined carbon intensity values for:

• Liquid, gaseous, and solid fuels

• Extraction and production of feedstocks

• Supply chain transportation

• Liquefaction and compression

• Combustion

• Electricity generation

However, these default values do not capture every possible fuel pathway. They also may not fully represent the upstream activities associated with a specific producer’s unique process.

So the fundamental question becomes: How can the life cycle carbon intensity of fossil fuels, low-carbon fuels, and supporting processes be estimated in a way that is representative, consistent, and transparent? The answer was the development of the Fuel LCA Model.

29:39 The Fuel LCA Model (openLCA Platform)

Environment and Climate Change Canada developed a model based on the openLCA software platform.

Participants in the CFR program use this model to estimate life cycle carbon intensity of fuels and energy sources produced and used in Canada.

This is a publicly available modeling tool. It runs in openLCA, which is a free software platform.

The Fuel LCA Model generally consists of:

• A library of predefined processes

• A library of configurable low-carbon fuel pathways

• An impact assessment method for calculating carbon intensity

The impact assessment methods are based on IPCC characterization factors. As of the most recent update, both AR5 and AR6 characterization factors are available.

The tool is not limited strictly to CFR participants. Because it is publicly available, consultants, academics, and others may also use it.

Environment and Climate Change Canada provides extensive documentation, including:

• A methodology report

• A user manual

• Pre-recorded tutorials

There is strong guidance on how to use the tool.

31:55 Accessing the Tool

To access the Fuel LCA Model, you first download the openLCA software platform.

Then you download the Fuel LCA Model database from the CFR website.

You import that database into openLCA.

There are detailed instructions available online to guide users through this process.

32:35 Demonstration of openLCA Structure

I’m going to show you what the inside of the openLCA tool looks like.

As you can see, the interface is very different from the Excel-based tools Lise showed earlier.

OpenLCA is a fairly advanced LCA software tool. It’s a desktop-based modeling environment, not web-based, and not drag-and-drop. It is more of an engineering simulation-style tool.

On the left side, you see the database structure. The Fuel LCA Model is imported as a database.

Within that database are the components needed to model fuel pathways.

33:57 The Data Library

The first key component is the data library.

This includes commonly used material and energy inputs for fuel life cycles, such as:

• Chemical inputs

• Electricity options

• Feedstocks

• Fossil fuels

• Renewable fuels

• Transportation options (pipelines, trains, trucks, tankers)

For fossil fuels, the carbon intensity values have already been determined by Environment and Climate Change Canada and are published in legislation.

If you open a fossil fuel process, such as diesel, you will see documentation about how it was created and what assumptions were used.

When you look at inputs and outputs, you will notice that you do not see material and energy inputs listed. Instead, you see greenhouse gas emissions outputs that represent the full life cycle carbon intensity.

For example, diesel might show a carbon intensity of approximately 92.3 grams CO?e per megajoule, with breakdown by greenhouse gas.

36:30 Configurable Fuel Pathways

Beyond the data library, there are configurable fuel pathways.

These are essentially templates that break down a fuel life cycle into stages.

For example, a biodiesel pathway would be broken down by:

• Feedstock production

• Fuel production

• Distribution

• Combustion

These templates are empty structures where users input their own data. If no data are entered, the carbon intensity would be zero. Predefined pathways, on the other hand, already include data and can be analyzed immediately.

38:13 Allocation Example

As an example, we can compare biodiesel from canola oil under two allocation approaches:

• Energy-based allocation

• Mass-based allocation

Under energy-based allocation, the carbon intensity might be approximately 28.7 grams CO?e per megajoule.

Under mass-based allocation, it might drop to around 23.8 grams CO?e per megajoule.

This demonstrates that allocation choices significantly influence carbon intensity results.

40:17 Submitting a Carbon Intensity Under the CFR

To participate in the CFR, you must use the Fuel LCA Model.

You may either:

• Use existing carbon intensities from predefined pathways, or

• Build a new fuel pathway within the model

There is also a data workbook that must be completed and submitted alongside the openLCA model.

The workbook ensures that everyone uses consistent:

• Conversion factors

• High heating values

• Energy densities

41:51 New Pathway Approval Process

If your fuel pathway is not adequately represented in the model, you must apply for approval of a new pathway.

This requires:

• A data quality assessment

• A plan for collecting verifiable data

• Modeling conformant with ISO standards

• Submission of both the workbook and openLCA model

Approval is required before using the new pathway for compliance.

43:40 Data Requirements

An approved carbon intensity requires 24 months of consecutive input data for the specified fuel pathway.

If you do not have 24 months of data, there are alternatives:

• Use predefined carbon intensities on an interim basis

• Apply for temporary carbon intensities

44:03 Methodological Details

The Fuel LCA Model:

• Conforms to ISO standards

• Uses 1 megajoule (HHV) as the functional unit

• Expresses results in grams CO?e per MJ

• Does not include construction, decommissioning, or infrastructure

• Does not include indirect land use change

• Uses energy-based allocation by default

• Uses cutoff for certain waste feedstocks

• Sets biogenic CO? emissions to zero

48:22 Q&A Session

Question 1: Can you elaborate on how the provisional emissions rate process will work? Will applicants need to submit their own LCA, or will Argonne perform it?

Lise: You will need to complete your own LCA using GREET and submit it. Argonne will review the submission, but you are responsible for conducting the modeling.
Question 2: Is the version of the Fuel LCA Model that includes AR6 indicators publicly available?

Nathan: Yes. The AR6 characterization factors are available. In some cases, they may need to be downloaded separately and imported into the model.
Question 3: Do the electricity requirements for electrolysis include balance-of-plant or water purification energy?

Lise: Those must be included by the user. You are responsible for accounting for the energy required for water purification and other associated processes.
Question 4: Does 45V address hydrogen carrier liquids such as formic acid?

Lise: No. Those pathways are not currently included in the tool. You would need to petition for a provisional emissions rate if using such a pathway.
Question 5: How do we know the material and energy inputs used in the data library?

Nathan: The openLCA interface does not display all underlying inputs. However, Environment and Climate Change Canada provides detailed background documentation explaining assumptions and data sources. Some of that data is confidential. 

Question 6: Do NETL openLCA databases rely on background databases, such as ecoinvent, or is it complete?

Lise: They are largely self-contained, but in some cases additional datasets such as ecoinvent may be incorporated when appropriate. 

Question 7: What is the difference between predefined pathways and data library processes?

Nathan: Predefined pathways contain complete data and can be used directly, and calculate CI directly for them. Data library processes are building blocks. Configurable pathways require user-supplied data.

Question 8: Is the CFR approach applicable to wood waste?

Nathan: Sawmill waste and certain wood chips are included. Canada typically treats them as co-products with allocation, while the U.S. NETL tool may apply cutoff treatment. There is a philosophical difference between the two programs.

Closing Remarks

We are at time and will need to conclude the Q&A.

We will follow up with responses to any unanswered questions and provide a recording of this webinar.

Thank you again to Lise and Nathan for an excellent presentation.

The two experts you heard today are part of the broader EarthShift Global team. We are here to support your sustainability and life cycle assessment needs.

You can stay up to date on upcoming webinars and EarthShift Global updates by subscribing to our monthly newsletter, The Shift, at www.earthshiftglobal.com/newsletters

Thank you all for your time and attention, and we wish you a wonderful rest of your day.