Sustainable Aviation Fuel Could Help Clear the Air, Former Kansas Senator Says | Opinion

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July 15, 2024

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by Pat Roberts (Wichita Eagle/Americans for Clean Aviation Fuels) ... Unfortunately, SAF represents less than one percent of the current market and costs two to four times more than traditional jet fuel.

To tackle this challenge, the 2022 Inflation Reduction Act included two tax credits for SAF production — the 40B and 45Z credits— which have spurred excitement and initial investment in the industry.

These credits are critical to catalyzing investment in domestic SAF production, delivering substantial domestic economic benefits. However, the 40B Blenders Tax Credit is set to expire after just two years and transitions into a new three-year 45Z Clean Fuel Production Credit, creating uncertainty about the long-term economics of SAF production. The credit is set to expire just around the time producers would be looking to bring new facilities online.

Industry and value chain players generally need 10 years or more to appropriately plan and make strategic investment decisions. To truly unlock the potential of SAF, lawmakers must prioritize a robust and enduring policy framework. The Biden administration must also provide greater regulatory clarity and flexibility around the implementation of climate-smart agriculture practices, which adapt current farming practices to account for changes in the local climate, and incorporate processes such as cover cropping, nutrient management and conservation tillage.

The recent release of the administration’s Greenhouse gases, Regulated Emissions, and Energy use in Technologies — GREET— model guidance is an important step in the right direction, but American farmers are looking for a level of certainty that can only come from providing further clarity around the use of these climate-smart ag practices. They need a framework that allows them to adopt regionally appropriate practices that have been rigorously validated as effective in reducing emissions.

By crafting smart, science-based solutions, policymakers can incentivize the substantial investments needed to scale up these important farming techniques.

Another key challenge is the complex web of regulations governing biofuel production and use. Many promising SAF feedstocks grown by today’s farmers, such as ethanol derived from cornstarch, are not currently approved as “advanced biofuels” under EPA regulations. This limits their eligibility for key incentives.

Streamlining the pathway approvals process for new SAF feedstocks represents low-hanging fruit and should be a top priority.

The 45Z credit offers a promising model on the legislative front, but must be extended well beyond its current 2027 expiration date.

Support beyond tax credits is needed as well — targeted federal grant programs and loan guarantees can also play a vital role in scaling up the SAF industry.

A Federal Aviation Administration FAST program, Fueling Aviation’s Sustainable Transition, includes support for SAF and is a good start. But it should be expanded and strengthened over the coming years to help reduce the risk of investment in this burgeoning market.

STATE HAS ROLE TO PLAY

State-level policies have an important role to play, too.

Several states, including Nebraska, Minnesota, Washington, and Illinois, have already passed their own SAF incentives. These state-specific policies can complement federal measures, making SAF production even more economically viable and encouraging production beyond California.

In the coming years, expect to see a push for similar incentives in other key biofuel producing states across the corn belt. By enacting smart, forward-looking policies today, we can help to scale up this promising clean fuel solution and put aviation on a path toward a more energy secure future.

The journey ahead may be long and turbulent, but the destination — a thriving, low-carbon aviation industry that supports American farmers and creates good jobs — is well worth the effort.

It’s time for policymakers, industry leaders, and stakeholders across the value chain to come together and make the promise of SAF a reality. READ MORE

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Farmers are Struggling, Washington Should Act (Real Clear Policy/National Corn Growers Association)
Fueling flight: Utilizing biofuels in aviation (Office of U.S. Senator Jerry Moran (R-KS)/Washington Times)

Excerpt from Real Clear Policy/National Corn Growers Association: Corn prices have dropped 37% from last summer’s high, falling below our break-even cost of production. Farmers are faced with a tough choice: sell at a loss or hold in hopes of better prices. That’s not just true for our crop today, but last year’s crop too.

The U.S. Department of Agriculture’s June stocks report shows farmers have 36% more corn in storage than a year ago, the largest level for this time of year since 1999.

...

I look at the flooding on my own fields today with the same uncertainty.

To turn the tide and help farmers, we need the nation’s policymakers to act on legislation and regulatory matters that have been bottlenecked in Washington due to partisan conflicts.

Next week, hundreds of corn growers will descend on Washington to meet with officials to talk about these issues and to encourage them to act on our priorities.

Among our specific asks:

Pass a robust farm bill that addresses our priorities this year. The farm bill is so important to growers on every front. USDA programs are particularly crucial to open and cultivate foreign markets and for a safety net for farmers during hard economic times. While the House Agriculture Committee has marked up its version of the legislation, the Senate committee and both chambers need to come together to pass a bipartisan bill into law.
Act to expand markets for corn ethanol. Despite the many environmental benefits of ethanol, recent Biden administration decisions have complicated corn growers’ path to accessing new sustainable tax credits that would lower emissions in the aviation sector. There is also stalled legislation, including the Next Generation Fuels Act and a bill that would allow nationwide access to year-round E15, that would increase consumer access to corn ethanol. And we need to change the law to allow ethanol from corn starch to qualify as an advanced biofuel, which would spur demand both here in the U.S. and abroad. We need forward movement on all these issues.
Drop tariffs on key inputs, including fertilizers and herbicides that are critical to planting. NCGA has consistently told the Biden administration that when tariffs are imposed on imports of agricultural products, farmers pay the price. Yet, one federal agency recently sided with a multi-national company after it petitioned the government to place tariffs on imports of phosphorous fertilizers from Morocco. U.S. officials also advanced a petition this year that could lead to tariffs on imports of a much-needed herbicide called 2,4-D. These types of actions drive up prices for farmers, and we need the Biden administration to intervene.
Eliminate trade barriers and cultivate new markets. Opening new markets and reducing barriers to existing markets for biofuels is crucial to growing demand for corn growers and other farmers. For example, Congress should pass legislation to renew expired trade programs, like the Generalized System of Preferences and the Miscellaneous Tariff Bill, both of which help to foster international collaboration on market access. READ MORE

Excerpt from Office of U.S. Senator Jerry Moran (R-KS): Kansas is also home to Wichita, the Air Capital of the World, where thousands of airplanes and aircraft parts are manufactured every year.

In partnership with SAFFiRE Renewables and Southwest Airlines, Kansas will also soon break ground on a facility that will process corn stover for the production of renewable ethanol, which will then be converted into SAF.

This is an exciting pathway to producing high-volume, affordable SAF.

The SAF industry has the opportunity to experience tremendous growth, create more markets for our farmers and increase our domestic energy production and security, but Congress and the administration need to remove barriers that are blocking the path to success.

I introduced the Farm to Fly Act to help accelerate the production and development of sustainable aviation fuel through existing U.S. Department of Agriculture (USDA) programs. This legislation would allow further growth for alternative fuels to be used in the aviation sector and create new markets for American farmers.

This legislation would increase the accessibility of biofuels for commercial use and directly support rural America and its farmers, the agriculture industry and the aviation sector.

Reports indicate that the global sustainable aviation fuel market size and share is expected to grow from its current market revenue of $1.1 billion to $3 billion by 2034.

Unfortunately, recent policies issued by the Biden administration are hampering the growth of the SAF industry by limiting the types of crops that can be utilized in SAF production.

To unleash the potential of the SAF industry, the Biden administration needs to finalize the 45Z tax credit so further commitments and investments can be made.

Under the guidance issued by the Department of Treasury, there won’t be enough grain feedstock to meet processing demand, and rejecting grain feedstocks is a giant leap backwards for SAF production in the U.S.

The Treasury Department’s guidance for the SAF tax credit only allows corn ethanol to qualify if the grain is grown with three practices that are considered “climate-smart:” no-till, cover crops and energy-efficient fertilizer. Soybean oil would qualify only if the soybeans were grown using no-till and cover crops on the same acreage.

The eligibility requirements are so strict that very few farmers can produce eligible feedstocks and the guidance excludes grain sorghum as an eligible feedstock.

Grain sorghum is drought-tolerant, heat-resistant and low-input all factors that contribute to its low carbon intensity (CI) score. These attributes, combined with the demand for renewable energy plants throughout the Midwest, make grain sorghum a great candidate to produce sustainable and climate-smart energy products.

Today, only a small percentage of producers meet Treasury’s eligibility requirements, which severely hinders the amount of fuel that can be produced.

To bring more awareness to SAF, I am excited to announce the Senate Sustainable Aviation Caucus. Last month, the House of Representatives launched its own Sustainable Aviation Caucus, and I’m pleased to lead this effort in the Senate. SAF can unlock tremendous benefits for the economy and our farmers while offering a cleaner source of energy for aircraft and a new energy source for our nation.

The industry is poised for success. Yet achieving its full potential hinges on employing the right tools and implementing more workable regulations.

• Sen. Jerry Moran, R-Kansas, is the senior senator and serves as the chair of the Senate Sustainable Aviation Caucus. Sen. Moran also serves as the lead Republican on the Senate Commerce Subcommittee on Aviation Safety, Operations, and Innovation and is a member of the Senate Appropriations Subcommittee on Agriculture. READ MORE

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