The Biden Administration on Tuesday released its guidance on the eligibility of corn- and soy-based ethanol for tax credits in the production of sustainable aviation fuel.
Under U.S. Treasury Department guidelines, SAF that achieves a life cycle carbon emissions reduction of at least 50% compared with conventional jet-A is eligible for a tax credit of $1.25 a gallon with one cent added per percentage point above that, up to a maximum of $1.75 per gallon. The credits are viewed as a strong incentive for SAF producers.
The long-awaited measure imposed some restrictions on corn and soy feedstock use, mandating that certain climate-smart agricultural practices must be incorporated into crop production in order for the fuel to meet greenhouse gases, regulated emissions, and energy use in technologies (GREET) life cycle analysis criteria. Those farming practices include no-till, use of cover crops, and enhanced efficiency fertilizer.
“Today’s guidance and modified GREET model help position ethanol-based SAF for takeoff, but more work is needed to fully clear the runway and get this opportunity off the ground,” said Geoff Cooper, president and CEO of the Renewable Fuels Association. “We are encouraged that, for the first time ever, this carbon scoring framework will recognize and credit certain climate-smart agricultural practices.” Cooper added that "less prescription on agriculture practices, more flexibility, and additional low-carbon technologies and practices should be added to the modeling framework to better reflect the innovation occurring throughout the supply chain.”
The regulation did attract some criticism from Congress, with Chuck Grassley (R-Iowa) noting two issues with its restrictions. “First, this new formula is going to be easy to violate. Second, without grain in the formula, there won’t be enough feedstock to make all the sustainable aviation fuel environmentalists are crying for,” he said. “Widespread use of sustainable aviation fuel will help fight global warming, but rejecting grain feedstocks will impede efforts to produce that fuel on a global scale.”