Biden Administration to Delay Aviation Fuel Subsidy Guidance until December, Sources Say

September 08, 2023

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by Stephanie Kelly and Jarrett Renshaw (Reuters) - President Joe Biden's administration likely will delay until December a decision on whether to make it easier for sustainable aviation fuel made from corn-based ethanol to qualify for subsidies under the White House's signature climate law, two sources familiar with the discussions said on Wednesday.

The administration has been divided over the issue, which has prompted a fierce lobbying push from U.S. Farm Belt stakeholders that see sustainable aviation fuel (SAF) as crucial for the ethanol market's growth. Environmental groups, on the other hand, say clearing land to grow crops for fuel is counterproductive to curbing global warming.

The White House did not immediately respond to a request for comment.

John Podesta, a senior White House adviser on clean energy, has been tasked with resolving the issue, Reuters reported in August. At the time, a White House official told Reuters that the administration's SAF policy seeks to include ethanol, but "we are trying to seek alignment with stakeholders on the question of modeling."

At issue is a requirement in last year's Inflation Reduction Act (IRA) that SAF producers seeking tax credits must demonstrate with an approved scientific model that their fuel generates 50% less greenhouse gas emissions over its lifecycle than petroleum fuel.

Midwest ethanol producers have asked the administration to adopt a model that would enable ethanol-based SAF to qualify while environmentalists want standards that would favor inputs like used cooking oil and animal fat.

The administration's decision will determine who benefits from billions of dollars in subsidies expected under the program. It was expected to announce a decision by September. READ MORE

Ethanol Blog -- Corn Growers Press Treasury Secretary Yellen to Use GREET Model in Sustainable Aviation Fuel Tax Credits (DTN Progressive Farmer)

Treasury lays out next phase of clean energy tax credit implementation (Politico Pro)

Corn Grower Leaders Call on Biden Administration to Tie U.S. Tax Decisions on Aviation Biofuels to Government’s Emissions Model (Albert Lea Radio)

Treasury lays out next phase of clean energy tax credit implementation (Politico Pro)

SAF subsidies for corn-based ethanol producers could be delayed (Biofuels International)

NCGA Urges Treasury To Adopt GREET For SAF Tax Credit (Ethanol Producer Magazine)

Minnesota ag official urges adoption of GREET for SAF tax credit (SAF Magazine)

ACA calls on Treasury to adopt GREET for SAF tax credit (SAF Magasine)

How Much Can Farmers Earn From Substantiable Aviation Fuel (AgWeb)

Ethanol Groups Urge Treasury To Adopt GREET For SAF Tax Credit (Ethanol Producer Magazine)

Tie U.S. aviation biofuels tax decisions to government’s model: Corn leaders (AgriNews)

Clean Fuels, ASA, NOPA and U.S. Canola Urge Use of GREET Model for SAF Tax Incentives (Clean Fuels Alliance America)

Transportation coalition urges IRS to ‘uphold congressional intent’ for SAF modeling (NATSO/Biobased Diesel Daily)

ASA, CLEAN FUELS AND OTHERS ASK ADMINISTRATION TO LEVEL THE PLAYING FIELD FOR SAF (Brownfield Ag News)

Excerpt from Politico Pro: The Treasury Department is teeing up guidance on several tax credits in Democrats’ climate legislation that are designed to boost American manufacturing and energy security, including measures for electric vehicles, sustainable aviation fuel and clean hydrogen production.

"This focus will lower energy costs for households and small businesses and encourage American innovation for a clean energy economy, including decarbonizing heavy industries and transportation," Deputy Treasury Secretary Wally Adeyemo told a media briefing.

Assistant Secretary for Tax Policy Lily Batchelder told reporters the department expects to issue guidance in the near term for the energy efficient home credit and sustainable aviation fuel credit. READ MORE