[originally published in Biofuels Digest]
In Washington, the U.S. Division of the Treasury and Inner Income Service launched steering on the Sustainable Aviation Gasoline Credit score established by the Inflation Discount Act, and stated that pending additional steering from the Treasury Division, an up to date GREET mannequin will present one other methodology for SAF producers to find out the lifecycle GHG emissions charges of their manufacturing for the needs of qualifying for the SAF Credit score for SAF offered or used throughout calendar years 2023 and 2024.
As well as, EPA, DOT, USDA, and DOE are asserting their dedication to launch an up to date model of DOE’s GREET mannequin by March 1, 2024.
The Credit score Backstory
The credit score incentivizes the manufacturing of SAF that achieves a lifecycle greenhouse gasoline emissions discount of at the least 50% as in contrast with petroleum-based jet gasoline. Producers of SAF are eligible for a tax credit score of $1.25 to $1.75 per gallon. SAF that decreases GHG emissions by 50% is eligible for the $1.25 credit score per gallon quantity, and SAF that decreases GHG emissions by greater than 50% is eligible for an extra $0.01 per gallon for every share level the discount exceeds 50%, as much as $0.50 per gallon.
Fuels that obtain a 50% or better discount in lifecycle greenhouse gasoline emissions beneath the latest Carbon Offsetting and Discount Scheme for Worldwide Aviation (CORSIA) commonplace will proceed to qualify beneath right this moment’s steering. The up to date mannequin will incorporate new knowledge and science, together with new modeling of key feedstocks and processes utilized in aviation gasoline. The up to date mannequin will even combine different classes of oblique emissions like crop manufacturing and livestock exercise, along with finest out there science and modeling of oblique land use change emissions. The up to date mannequin will even combine key greenhouse gasoline emission discount methods corresponding to Carbon Seize and Storage, Renewable Pure Gasoline, Renewable Electrical energy, and Local weather-Good Agriculture Practices. The Treasury Division first supplied SAF credit score steering in December 2022.
The Backside Line
Initially, pop the cork for this one, it’s Christmas and New Years comes early. Second, put a phrase of thanks for Tom Vilsack in your bedside prayers tonight. This victory has a thousand mother and father, however precisely one quarterback, the Huge V.
Response from the Stakeholders
U.S. Secretary of Agriculture Tom Vilsack
“The Biden-Harris Administration is dedicated to harnessing the potential of sustainable aviation gasoline to develop new financial alternatives for American agricultural producers. As we speak’s announcement is the subsequent step in making this 36-billion-gallon business all of the extra attainable. By powering aviation by means of low-carbon fuels, farmers can earn additional revenue, faucet into value-added climate-smart agriculture markets, and meet the demand for an aviation business that seeks to speed up sustainable manufacturing.”
Secretary of the Treasury Janet L. Yellen
“The Biden Administration is driving American innovation to create good-paying jobs and assist the U.S. clear hurdles in our clear power transition. Incentives within the Inflation Discount are serving to to scale manufacturing of low-carbon fuels and lower emissions from the aviation sector, one of the crucial difficult-to-transition sectors of our economic system.”
U.S. Secretary of Vitality Jennifer M. Granholm
“President Biden’s Investing in America agenda is creating pathways and incentives for innovators to create a cleaner, extra sustainable future. Sustainable aviation gasoline will present low carbon gasoline made right here in America to assist decarbonize the toughest to succeed in areas within the transportation sector, and DOE is dedicated to supporting this effort which is able to result in cleaner skies for all.”
U.S. Transportation Secretary Pete Buttigieg
“America ushered within the jet age, and aviation is a key a part of our economic system, society, and lifestyle. However the security and sustainability of aviation depend upon its means to succeed in its aim of net-zero carbon emissions by 2050. The time is now. That’s why President Biden is advancing the event of sustainable aviation fuels that may assist us scale back carbon air pollution whereas supporting financial development and creating alternative in American aviation.”
John Podesta, Senior Advisor to the President for Clear Vitality Innovation and Implementation
“Sustainable aviation gasoline is a essential device for tackling the local weather disaster. As we speak’s steering from Treasury supplies certainty that a number of pathways can be found to producers as they compete to decarbonize the aviation sector.”
Mike McAdams, president, Superior Biofuels Affiliation
“The Superior Biofuels Affiliation is grateful for the methodology and modeling flexibility outlined within the Treasury Division’s tips on Sustainable Aviation Gasoline (SAF) tax credit. Recognizing {that a} one-size-fits-all strategy is impractical, the Biden Administration’s acknowledgment of this actuality is essential for reaching vital carbon reductions in air journey. We lengthen our due to the Treasury Division, Division of Vitality, Division of Transportation, Environmental Safety Company, and the Division of Agriculture for his or her considerate steering and the immediate announcement following an intensive and collaborative effort.
Harold Wolle, President, Nationwide Corn Growers Affiliation
“On condition that GREET was created by the U.S. authorities and is broadly revered for its means to measure reductions in greenhouse gasoline emissions from the farm to the airplane, we’re inspired that Treasury will undertake some model of this mannequin. On the finish of the day, we’re keen to assist the aviation sector decrease its carbon footprint, and we stay up for working with the concerned businesses over the approaching months to make sure the ultimate mannequin helps us obtain that aim.”
Geoff Cooper, CEO, Renewable Fuels Affiliation
“Grain-based ethanol is, fingers down, probably the most ample and most cost-competitive supply for large-scale SAF manufacturing. With practically 200 ethanol biorefineries unfold throughout the nation, a well-established transportation and storage community, and the capability to provide nearly 18 billion gallons of low-carbon renewable gasoline, the puzzle items are already in place to ramp up ethanol-to-jet gasoline manufacturing. As we speak’s steering is a step in the suitable path and provides us hope that the U.S. ethanol business will be capable to take part on this exceptional alternative to decarbonize the aviation sector.”
Emily Skor, CEO, Progress Vitality
“New investments in SAF are extremely depending on the pending GREET modeling updates, and the business wants extra readability across the proposed adjustments earlier than we have now certainty round market entry. As we speak, beneath this steering, SAF produced from different biofuels together with Brazilian cane bioethanol qualifies for the 40B tax credit score, however the path for American-made corn-based bioethanol stays unclear. U.S. tax coverage shouldn’t benefit international corporations over home ones.”
Kurt Kovarik, Vice President of Federal Affairs for Clear Fuels
“We admire President Biden recognizing that American farmers and clear gasoline producers will probably be offering primarily the entire sustainable aviation gasoline out there over the subsequent 20 years to fulfill the administration’s Grand Problem. Enabling U.S. taxpayers to entry a lifecycle mannequin developed by U.S. nationwide labs is clearly one of the simplest ways to supply assurance to gasoline producers and meet the demand for low-carbon fuels from airways and passengers.”
Dr. Patrick Gruber, CEO of Gevo
“Gevo significantly appreciates the Biden Administration’s intent to make use of the Argonne GREET methodology and mannequin for sustainable aviation gasoline (SAF). As we speak’s steering is a much-needed step ahead for SAF funding and innovation. Designating GREET for the 40B credit score units an correct, science-based precedent for clear carbon accounting throughout the SAF provide chain, from farm fields to the top use of the gasoline. The small print and certainty matter.”
American Coalition for Ethanol CEO Brian Jennings
“As we speak’s choice helps clear the runway for ethanol-to-jet. Treasury made the suitable name to allow the usage of GREET to find out the carbon depth of SAF as a result of it’s the world gold-standard for calculating GHGs from transportation fuels and GREET is probably the most up-to-date, correct mannequin reflecting the best-available science, together with farm practices. Treasury’s choice will allow corn ethanol to emerge as a big SAF feedstock within the years to come back and fulfill President Biden’s pledge that farmers can be offering 95 p.c of SAF within the subsequent 20 years.
Iowa Renewable Fuels Affiliation Govt Director Monte Shaw
“Anti-agriculture agitators each within the U.S. and Europe have been pushing the Biden Administration to solely acknowledge fashions with outdated knowledge and debunked penalties towards farm feedstocks like corn and soybeans. IRFA appreciates the Treasury Division for standing with one of the best science out there.”
