US President Joe Biden’s administration is reportedly seen supporting the ethanol industry with the about-to-be revised methodology in aid to firms attempting to claim tax credits for sustainable aviation fuel (SAF).
The US government had a months-long division over whether to accept the Department of Energy’s (DOE) Green House Gases, Regulated Emissions, and Energy Use in Technologies (GREET) model.
Currently, the methodology is set to allow ethanol-based SAF to be eligible for tax credits under Biden’s signature Inflation Reduction Act (IRA).
The report signals a victory for the ethanol industry and the US Corn Belt, the country’s midwestern states, ahead of the presidential election next year.
Amid higher electric vehicle (EV) sales, the constituency considers SAF the sole avenue for increasing ethanol demand. The Democrat President is planning for re-election and will bank on votes from the tightly contested group, which are major corn producers.
However, the Biden administration is reportedly poised to announce their plans to update the GREET model by March 1.
The news had corn-based ethanol producers uncertain as the administration is anticipated to eventually apply stricter requirements for SAF feedstocks.
An intense lobbying push is the likely scenario until the updates are announced. Ethanol groups have clashed with environmentalists, favoring standards that boost feedstocks such as used cooking oil and animal fat.
The Treasury Department did not comment on the matter, while the White House has yet to respond to a request for one.
To claim tax credits under the IRA, SAF producers must prove, using an approved scientific model, that their fuel creates 50% less greenhouse gas emissions than petroleum fuel throughout its lifecycle.
Renewable Fuels Association (RFA) President Geoff Cooper has stated that the Biden administration’s decision was a crucial moment for the future of sustainable aviation fuels.
The ethanol industry has urged the US to adopt ready technology, like ethanol, to cut CO2 emissions immediately.
International Council on Clean Transportation (ICCT) fuels team lead Nikita Pavlenko said the GREET model’s potential underestimation of emissions from tilling land for crops, a primary concern for environmental groups, seems unresolved.
Pavlenko added that GREET’s lifecycle emissions for any fuel can vary significantly depending on the data sources and expectations connected to the tool. Furthermore, any future update on the way producers use GREET requires a strict method.
On Thursday, White House adviser John Podesta announced that guidance on SAF would be revealed pretty soon.
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