SAF Modeling Debate Isn’t Really about “GREET vs. ICAO.” It’s about Current Data vs. Old Data.

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August 22, 2023

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by Geoff Cooper (Renewable Fuels Association) Last year’s Inflation Reduction Act created tax credits meant to stimulate the production and use of sustainable aviation fuel (SAF), a critical tool in the aviation sector’s decarbonization strategy.

To qualify for the tax credits, SAF must reduce lifecycle greenhouse gas emissions by at least 50% compared to conventional jet fuel. SAF that achieves the minimum 50% reduction earns a tax credit worth $1.25 per gallon. The value of the credit increases as the carbon intensity of the SAF decreases, topping out at $1.75 per gallon for SAF that has net-zero or carbon-negative emissions. For the purposes of estimating the carbon intensity of different SAF options, Congress directed the U.S. Treasury to use the methodology established by the United Nations’ International Civil Aviation Organization (ICAO) or a “similar methodology.”

RFA and many other stakeholders (including airlines, SAF producers, farm groups, members of Congress and university researchers) have argued that Treasury should recognize the Department of Energy’s GREET model as a “similar methodology” for the purposes of determining SAF carbon intensity (and, thus, tax credit values). Meanwhile, some in the environmental community are pushing the Treasury to require that the ICAO methodology be used exclusively.

Those environmental groups have attempted to label our advocacy on SAF modeling as some kind of behind-the-scenes, clandestine lobbying effort to purportedly “weaken” SAF standards. Nothing could be further from the truth.

We support using the DOE GREET model because it would strengthen the credibility, transparency, and scientific robustness of the SAF tax credit program. Period. In addition, Congress required the use of DOE GREET for estimating the carbon intensity (and tax credit values) for non-aviation fuels under separate provisions on the IRA. Why should Treasury use different rules (and different methodologies) for different fuels, when Congress gave it the authority to harmonize the approach?

In any case, the SAF modeling debate has been mired by confusion and purposeful misdirection about the actual differences between the DOE GREET methodology and the ICAO methodology.

The truth is, DOE’s GREET isn’t just a “similar methodology” to ICAO…it’s really the “same methodology.” The two approaches aren’t all that different. Both use the GREET model to assess direct supply chain emissions, and both rely on Purdue University’s GTAP model to analyze potential land use change scenarios.

So, if DOE GREET and ICAO are generally using the same approach and modeling tools, why are their carbon intensity results for certain SAF options (like corn ethanol-to-jet) so much different?

The answer is simple: One methodology (DOE GREET) uses the most up-to-date data and assumptions regarding crop and biofuel production, while the other (ICAO) uses grossly outdated information and faulty assumptions.

In fact, for its estimates of emissions related to corn and ethanol production, ICAO uses a version of the GREET model from 2012 (ICAO also relies on European crop and ethanol production data from the 2006-2012 timeframe). DOE has publicly released no fewer than 13 updated or revised versions of GREET since 2012, which begs the question: why is ICAO still using an obsolete GREET model version from 11 years ago?

For estimating hypothetical land use change (LUC) emissions, ICAO uses Purdue’s GTAP-BIO model. This is the same model that is integrated with the DOE GREET model for assessing LUC scenarios. Again, the big difference between DOE GREET and ICAO on LUC emissions estimates is not the model used; rather, it’s the data and assumptions plugged into the model. ICAO uses land use change “emissions factors” and elasticities developed in 2014 by U.C. Berkeley and the California Air Resources Board. Meanwhile, the DOE GREET team uses emissions factors from a module called “CCLUB” (developed by scientists at Northwestern University, Argonne National Lab, and the University of Illinois), which was updated as recently as October 2021.

RFA and others are simply asking the Treasury to allow the use of the latest versions of GREET (integrated with GTAP and CCLUB), which was released in March 2023 and is populated with the most current data regarding corn and ethanol production factors.

RFA has developed this handy “cheat sheet” to explain the key differences between the DOE GREET approach and the ICAO approach. Again, the two approaches use the same basic methodology and modeling tools. The difference in results boils down to the fact that one (DOE GREET) uses current information about crop and ethanol production and one (ICAO) uses grossly outdated information, proving correct the adage that “a model is only as good as its underlying assumptions and data” (others have put it a little more bluntly: “garbage in, garbage out”!) In the end, the SAF modeling debate shouldn’t be characterized as “GREET vs. ICAO.” It’s really more about current data vs. old data. READ MORE

Related Articles

UNDERSTANDING THE DIFFERENCES BETWEEN THE DOE ARGONNE GREET METHOD AND ICAO METHOD FOR ETHANOL-TO-JET SAF CARBON ACCOUNTING (Renewable Fuels Association)
ACA Calls On Treasury To Adopt GREET For SAF Tax Credit (American Carbon Alliance/Ethanol Producer Magazine)
RFA Seeks Fair Treatment for Ethanol as SAF Feedstock (Energy.AgWired.com; includes AUDIO)
Biofuel groups hopeful on IRS rules for SAF tax credit (Agri-Pulse)
Ethanol Maker Says US ‘Green’ Jet Fuel Fate Hinges on Tax Policy-- Green Plains CEO expects US guidance as soon as September; Decision on how to track emissions key to IRA benefit (Bloomberg)
Minnesota ag official urges adoption of GREET for SAF tax credit (Biodiesel Magazine)
DRAWBACKS OF ADOPTING A “SIMILAR” LCA METHODOLOGY FOR U.S. SUSTAINABLE AVIATION FUEL (SAF) (International Council on Clean Transportation)
Sustainable Aviation Fuel Industry Leaders Call on Biden Administration to Immediately Recognize Argonne GREET Model (Renewable Fuels Association) The full letter and list of signatories is available here.
US airlines back ethanol industry position on aviation fuel credit (Reuters)
Boeing, ADM Push Yellen to Act Fast on Green Jet Fuel Tax Policy (Bloomberg)
Reducing Carbon Emissions through U.S. Sustainable Aviation Fuels (U.S. Department of Energy)
Bill seeks accurate measures of how well biofuels cut carbon emissions (BIO News)
SAF Leaders Urge Biden Administration to Use GREET Model (American Ag Network)
Advancing development, adoption of SAF through a pragmatic, inclusive, collective global framework (Singapore's Ministry of Transport/Biobased Diesel Daily)
How John Podesta Is Thinking About the IRA’s Big Final Tax Credits (Heatmap)
Looking for a Greener Way to Fly -- The Treasury Department is about to announce tax credits for sustainable aviation fuel, which raises the question: What fuels are actually “sustainable”? (New York Times)
Biden administration to release aviation fuel subsidy guidance by end of week - sources (Reuters)
US Readies Long-Awaited Guidance on Sustainable Jet Fuel Tax Policy: US Treasury set to issue tax credit guidance as soon as Friday; Key details though aren’t expected until spring of next year (Bloomberg)
Treasury Expected to Release SAF Guidance (Energy.AgWired.com)
RFA anticipates guidance on sustainable aviation fuel tax credits (The Fence Post)
TREASURY COULD ISSUE GUIDANCE ON SAF TAX CREDITS SOON (Brownfield Ag News)
Uncertainty on SAF tax subsidy remains as agencies update carbon calculations (Agri-Pulse)

Excerpt from Biodiesel Magazine: In the letter, Petersen specifically criticizes the CORSIA model for failing to credit climate-smart agricultural practices, carbon capture and sequestration (CCS), and the use of low-carbon intensity electricity and hydrogen. “We should reward farmers who adopt increasingly lower-carbon operations and practices onsite and prevent misaligned incentives that fail to recognize and encourage cleaner processes and products,” he wrote.

The Minnesota Bio-Fuels Association (MN Bio-Fuels) issued a statement Aug. 25 applauding Petersen’s letter. “Minnesota Bio-Fuels Association is grateful for Commissioner Petersen and Secretary Vilsack’s efforts to ensure Minnesota farmers and ethanol producers can continue contributing towards the decarbonization of our transportation sector,” said Brian Werner, executive director of MN Bio-Fuels. “We urge regulators in Washington to adopt SAF tax credit guidance that supports Minnesotan farmers and biofuels."

A full copy of the letter is available on the MN Bio-Fuels website. READ MORE

Excerpt from BIO News: The EPA is still using a model established in 2010 that only recognizes ethanol as being about 20% cleaner than fossil fuels. However, the Department of Energy (DOE) relies on the more-accurate Argonne model, which shows ethanol reduces greenhouse gas emissions by around 50% compared to fossil fuels.

“Argonne National Laboratory is recognized globally as one of the leading experts in this type of (life-cycle analysis) research,” according to the DOE. “Argonne’s analysis found that carbon emissions from U.S. corn ethanol have fallen 20% between 2005 and 2019 due to increased corn yields per acre, decreased fertilizer use, and improved ethanol production processes.”

The EPA needs to join DOE in embracing the better methodology according to John Torres, Director of Federal Government Relations for Agriculture & Environment at the Biotechnology Innovation Organization (BIO).

“Older lifecycle models fail to recognize, and therefore fail to credit, technological advances in farming and biofuels, leading to woeful omissions in recognizing how modern-day practices are leading the way in lowering GHG emissions by 44%-52% compared to standard petroleum-based gasoline. The U.S. Department of Energy recognizes this.” Torres said. “It is unfathomable that two federal agencies disagree on using the latest science and discoveries to properly evaluate the progress that domestic biofuels have made in reducing GHG emissions.”

BIO supports the GREET Act READ MORE

Excerpt from Singapore's Ministry of Transport/Biobased Diesel Daily: In his statement, Chee (Chee Hong Tat, Singapore’s acting minister for transport) outlined the importance of a global framework that signals the aviation industry’s commitment to decarbonization, provides demand certainty to fuel producers and financing institutions, and mobilizes innovation, investments and financing to scale up global SAF development.

He said the global aviation sector should establish a quantified goal for SAF, but this should be done via a pragmatic and realistic approach.

Singapore proposed adopting a range for the quantified goal, with a pragmatic and credible lower bound, and a realistic yet ambitious upper bound to reflect the collective aspirations of member states, which ICAO and the international aviation community could adopt to spur SAF production and investments.

Chee highlighted that the framework should be fuel, feedstock and technology neutral, and should adopt an approach that is backed by scientific evidence, recognizing the Carbon Offsetting and Reduction Scheme for International Aviation sustainability criteria as a single global standard for determining feedstock and fuel acceptability. READ MORE

Excerpt from Heatmap: In an exclusive interview, the White House advisor tells Heatmap that rules around hydrogen, manufacturing, and aviation fuel are weeks away and offers a window into his thinking. -- ... He described the White House’s work as trying to balance between two bad outcomes: On the one hand, it could stifle the production of green hydrogen so much that “blue hydrogen,” produced using natural gas and carbon capture technology, dominates; on the other, it could boost green hydrogen so much that it distorts electricity markets nationwide.

...

But researchers at Princeton and MIT have argued that if hydrogen companies aren’t required to bring new clean energy resources onto the grid to account for the power that they’re using to make hydrogen, then they will inadvertently increase climate pollution. That is because if a nuclear reactor stops serving homes and businesses and starts powering hydrogen production, then natural gas and coal plants will likely produce electricity to fill the gap, at least in the near term.

...

Podesta was more sanguine about the other two tax credits. “We’ve got a game plan on [the sustainable aviation fuel tax credit], and I think it’s going to be fine,” he said, although he added that it would require updating a key Department of Energy model (GREET: Greenhouse Gases Regulated Emissions and Energy Use in Transportation Model) that governs the policy.

“We’ll be able to both stimulate production but also create environmental integrity in that program,” he said.

That policy is expected in the middle of December. READ MORE

Excerpt from The Fence Post: “It is not an exaggeration to say this guidance represents a ‘make-or-break’ opportunity for the future of the U.S. SAF industry,” said RFA.

“First and foremost, we seek explicit and specific recognition of the Argonne GREET model as an allowable methodology for determining the carbon intensity of various SAF production pathways (which ultimately determines whether SAF qualifies for the tax credit and the value of the credit),” RFA said in a statement.

RFA said it also seeks:
▪ “Direction on how producers are expected to apply for the credit, verify or certify carbon intensity scores, and reporting and recordkeeping requirements.
▪ Additional detail on validation and audit procedures.
▪ Fairness and consistency in how carbon intensity scoring methodologies are applied to all SAF feedstocks and pathways.”

RFA President and CEO Geoff Cooper said, “This is a pivotal moment for the future of sustainable aviation fuels. The Treasury guidance will go a long way in determining whether U.S. farmers and ethanol producers are able to significantly contribute to the goal of decarbonizing the aviation sector, or if they’ll be left by the wayside. Agriculture is ready to do its part; America’s ethanol producers are standing by with affordable, low-carbon solutions to immediately begin reducing emissions from air transportation. All we’re asking for is a fair, science-based methodology that gives us an opportunity to compete.” READ MORE