As 40B GREET Deadline Looms, RFA Offers Recommendations for SAF Emissions Modeling

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January 16, 2024

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(Renewable Fuels Association) In a letter submitted to the Biden administration today, the Renewable Fuels Association laid out recommendations for ensuring that the best available science and data are used in determining eligibility for the sustainable aviation fuel (SAF) tax credit established in the Inflation Reduction Act. The Treasury Department released guidance in December regarding the implementation of the credit, and the administration committed to releasing an updated version of the GREET model by March 1 for use in estimating the lifecycle greenhouse gas emissions of SAF.

“One of the most promising forms of SAF involves the conversion of ethanol to jet fuel,” wrote RFA President and CEO Geoff Cooper. “Ethanol has key advantages as a feedstock for SAF, as it is cost-competitive with petroleum-based fuels and is by far the largest-volume biofuel produced in the U.S, with output of nearly 16 billion gallons per year.”

The letter was sent to an interagency working group (IWG) that includes USDA, EPA, DOE, and FAA. It contained detailed comments and recommendations, including analysis of the strengths and weaknesses of different modeling tools, methodologies, and data sets being considered by the IWG for inclusion in the soon-to-be-updated “40B GREET model.” The letter also encouraged the IWG to ensure the new model is informed by actual observations and empirical data from the post-2005 period of biofuel expansion. The updated modeling framework should also take a practical approach to integration of climate-smart agriculture practices, RFA’s letter says.

“In order for the full potential of the IRA to be realized, it is imperative that the proper lifecycle analysis modeling framework be adopted by the Treasury and IRS,” the letter concludes. After slight modifications are made by the IWG to include more current data and information, “…the resulting 40B GREET should be determined to satisfy the CAA section 211(o)(1)(H) criteria.” READ MORE

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RFA Offers Recommendations for SAF Emissions Modeling (Energy.Agwired.com)
Waiting For Takeoff (Ethanol Producer Magazine)

Excerpt from Ethanol Producer Magazine: Nearly 19 months after the Inflation Reduction Act's passage, which established tax credits for sustainable aviation fuel made from low-carbon feedstocks, ethanol producers are still waiting for clear guidance on how they can join the push to decarbonize air travel. For many months, the ethanol industry waited for guidance on which carbon intensity models would be allowed for calculating the required 50 percent emissions reduction compared to standard jet fuel. The IRA states that producers must use CORSIA (Carbon Offsetting Reduction Scheme for International Aviation)—a carbon intensity measurement tool created and governed by the International Civil Aviation Organization. But the legislation also says “similar” methodologies may be used, and industry representatives and SAF project developers alike have championed the Argonne Greenhouse Gases, Regulated Emissions and Energy Use in Transportation (GREET) model for emissions. They argue that GREET is more accurate, broadly relied on in the U.S., and adjusted annually with new research. In December, long-awaited guidance from the U.S. Department of the Treasury was released, receiving mixed reactions from the ethanol and SAF industries—and creating a guessing game about what’s to come this spring.

The December 15th guidance states that producers will soon be able to use any of three models to measure the carbon intensity (CI) their product: CORSIA, Argonne's GREET, or a similar model used by the U.S. EPA in its oversight of the Renewable Fuel Standard. The IRS will also accept producers that replace synthetic blending components for jet fuel that generate D3, D4, D5, or D7 RINS and are validated by a Quality Assurance Program, or QAP, under the EPA’s facility-specific pathways. The guidance also stated that because the 2010 GREET model falls short of the EPA’s standards, the agency will develop a new “40B” GREET model that addresses these concerns; the new model is expected to be unveiled in March.

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Brian Jennings, CEO of ACE, is optimistic that the updates made to the GREET model will be scientifically sound and fair to grain ethanol. CORSIA’s land-use-change values are based on data from 2007 to 2012, he explains, which has a detrimental impact on CI—about 15 points. “A lot has changed in that time, and the GREET model is much more up-to-date; it’s updated annually. So, that’s just one glaring example of where the GREET model is more scientifically sound, because it’s more advanced and [research current],” Jennings says. He thinks the rationale for making updates to GREET may stem from the EPA’s concerns about Argonne’s approach to estimating methane emissions as well as the carbon intensity of not corn but rice production and livestock. “It’s my understanding [that] this has a lot to do with making sure those approaches are uniform,” he says. “And I am reasonably confident that most corn ethanol will be at least 50 percent cleaner than petroleum, which is the trigger that you have to reach to qualify for the sustainable aviation fuel tax credit.”

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Members of the SAF industry are also waiting to see how the guidance plays out. Patrick Gruber, CEO of Gevo, explains that the updated GREET model with the EPA’s comments is a concern because of the use of 2010 models. “EPA, remember, used 2010 data, and they like to stick to those; that’s not good for anybody,” Gruber says. “I’m waiting to see what the updated [model looks like] before I get too excited.”

Lindsay Fitzgerald, vice president of government relations at Gevo, explains that the EPA did a modeling comparison in 2023 and noted changes in its assumptions as well as the evolution of models over time. “I was a little surprised that they did not step up their game and [acknowledge] that they’ve already done a lot of this work,” she says. They didn’t have to land where they landed, in my opinion.”

The creation of safe harbors in the RFS, with an EPA-approved QAP and an RFS version of the GREET model in the guidance, is a win for LanzaJet and the SAF industry, explains Alex Menotti, vice president, government affairs, policy, and sustainability. However, he emphasizes the importance of measuring SAF with the same methodology used for other biofuels under the IRA. For example, the Clean Fuel Production Credits under 45Z instruct the use of the GREET model; and Menotti explains that achieving “modeling parity”—using the same models across programs—is vital to fulfill Congress’ desire to create stronger incentives for SAF production.

GREET v. CORSIA
GREET has estimated corn ethanol’s overall carbon intensity at 45 grams per megajoule (g/MJ), according to Michael Wang and colleagues at Argonne who, together, authored a 2021 white paper titled “Retrospective Analysis of the U.S. Corn Ethanol Industry for 2005–2019: Implications for Greenhouse Gas Emission Reductions.” When combined with GREET’s 2023 default indirect land-use change (ILUC) number of 8.6 g/MJ, the total becomes 53.6 g/MJ. Cooper also explains that most ethanol plants currently score in the low to mid-50s. If the carbon intensity of upgrading to jet fuel is included—between 20 and 25 CI points—the total under GREET is 71.6 g/MJ, according to a U.S. Department of Energy Bioenergy Technologies Office article from 2021, written by Jim Spaeth.

The ICAO lists corn ethanol’s overall CI score, including upgrading to jet fuel, at 77.9 g/MJ in the alcohol-to-jet pathway and 90.8 g/MJ in the ethanol-to-jet pathway. The differences between the methods are highlighted by the induced—not without debate—ILUC number. However, Jennings says ILUC’s hit to CI is between four and eight points under 2023 GREET, while ICAO’s numbers are 22.1 and 25.1 for the ATJ and ETJ fuel conversion pathways, respectively. Jennings explains that the EPA and the California Air Resources Board has significant ILUC penalties for ethanol as well, 29 points and 19 points respectively.

CORSIA uses a consensus strategy to determine the CI scores for various feedstocks, explains Steve Csonka, executive director of the Commercial Aviation Alternative Fuels Initiative. “They create methodologies that [account] for the fact that you might have two very different views of two very different countries involved in ICAO, [and what to]do when that happens,” he says. “And so, they establish some rules.” He explains that the default scores assigned to individual feedstock pathways are just that—default values—and producers can petition ICAO for a CI score specific to their process.

“The two methodologies don’t really take that different of an approach to estimating carbon intensity; it really all boils down to whether the methodology uses current data, [like] the Argonne GREET model, verses methodology that uses outdated, old information,” says Cooper.

There is potential for regenerative agricultural practices, such as reduced tillage, proper application of fertilizer, and cover cropping—all of which increase the amount of organic carbon stored in soil and prevent the release of atmospheric CO2—to be included in the updated GREET model. However, exactly what that will look like is still unknown. Cooper explains that flexibility is needed in each methodology’s ability to account for all carbon reduction strategies—including regenerative agriculture—that are available to ethanol producers.

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All of these factors, as well as delaying the guidance from the summer of 2023 to December, have made financing a large-scale SAF project, like Gevo’s proposed Net Zero 1 facility in South Dakota, a challenge.

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“It will incorporate, not for the first time, but in an indirect way, the emissions for crop production, livestock activity, and other greenhouse gas emission reduction strategies, like carbon capture and storage, use of renewable natural gas, renewable electricity, climate smart ag practices, etcetera,” Csonka says.

Menotti emphasizes the importance of making sure that climate smart ag practices are accounted for in the updated GREET model. “We are awaiting further guidance on what climate-smart agriculture practices, such as soil carbon sequestration, will be considered for the production of SAF,” Menotti says. “While the interagency group also indicated that it intends to account for renewable energy, carbon capture and sequestration, and renewable natural gas, the criteria for accounting for these carbon intensity reductions will be crucial.”

The lack of policy and regulatory certainty has made it challenging to get buy-in from private investors. “It is imperative that the Treasury Department confirms Congress’ intent for ethanol-based SAF to also utilize the GREET model, as otherwise producers will opt to make renewable diesel and other fuels (where the GREET model is already allowed under 45Z and 45V) as opposed to focusing on much-needed SAF,” Menotti says. “At the end of the day, the GREET model revisions, while a foundational piece for SAF, won’t matter without momentum on the tax credits extension.” He explains that GREET, as a model used to access 40B credits, will not provide enough certainty for the accelerated growth the administration is looking for if the time frame for the credits is not lengthened significantly.

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The irony of the IRA for the U.S. ethanol industry is the open door it lends to the Brazilian ethanol industry, while muddying the waters for U.S. biofuel producers. “It’s a little ironic that for an American statute that’s intended to spur the growth of American biofuels, under today’s guidance, Brazilian cane sugar bioethanol qualifies for the credit, but it’s unclear, you know, how and to what extent American corn-based ethanol does,” Kakesh (Joe Kakesh, general counsel with Growth Energy) says. READ MORE

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