USDA to Adjust GHG Model to Help Ethanol Get Aviation Fuel Subsidy

by Leah Douglas (Reuters) The U.S. Department of Agriculture will spend up to $400,000 to adjust a federal greenhouse gas (GHG) emissions model to ensure that aviation fuel made from corn-based ethanol is eligible for hefty subsidies, Agriculture Secretary Tom Vilsack said at a conference on Tuesday.

"We’re working on the modeling to make sure that there’s a broad array of feedstocks that can qualify, including ethanol," he said at a conference hosted by biofuels lobby group Growth Energy.

Vilsack's comments are his latest effort to calm a biofuel industry concerned it will be left out of the multibillion-dollar market for sustainable aviation fuel (SAF) airlines and the administration of President Joe Biden see as key to reducing transportation emissions.

Last year's Inflation Reduction Act included lucrative tax credits for SAF producers who can show with an approved scientific model that their fuel emits 50% less greenhouse gas than gasoline.

The Biden administration is divided over whether to grant a request from the biofuels industry to allow the use of the U.S. Department of Energy’s Greenhouse Gases, Regulated Emissions and Energy Use in Technologies (GREET) model.

Environmental groups say it underestimates emissions from the displacement of farmland or vegetation to grow crops for biofuels.

Vilsack, who supports the use of GREET, said the USDA is making adjustments to the model.

"We’re spending our own resources at USDA to make sure the GREET model is where it needs to be," he said.

The agency has identified between $300,000 and $400,000 in funds for the effort, which will be done by the end of the year, Vilsack said.

The USDA did not respond to questions about what specific adjustments the agency is making to GREET.

Vilsack also emphasized his efforts to build support for the GREET model in meetings with the secretaries of transportation, environment, and treasury.

Excerpt from DTN Progressive Farmer: U.S. Secretary of Agriculture Tom Vilsack didn't pull any punches on Tuesday when talking about rural America's and ethanol's future in sustainable aviation fuel production.

Vilsack said during a keynote address at the Growth Energy summit in Washington, D.C., that although there are hundreds of bio products that can be produced using agriculture waste including livestock manure, the future growth of SAF has created a new life for the ethanol industry.

Yet the question keeps coming up: Is ethanol's carbon footprint small enough to be the go-to feedstock for SAF?

Vilsack emphasized the need for the ethanol industry to continue to work to bring down its carbon score to be more attractive to airline companies expanding their SAF use.

"But you have to understand something else, which is that you have to be able to make the case that your product is in fact a low-carbon fuel and you want to do something with the CO2," he said.

"I'm not gonna tell you what you need to do about it, but you need to do something about it. And farmers need to understand the significance of this. Farmers come up to me and they say, 'Oh, we got to stop talking on electric vehicles.' No, because we want to make sure we continue to have manufacturing in this country because it employs a lot of people. We're gonna have cars that use ethanol for a long time."

One such avenue for ethanol plants is building carbon pipelines. So far, however, carbon pipeline projects have struggled to gain broad approval from state regulatory authorities, https://www.dtnpf.com/….

Vilsack shared a set of numbers that caught the attention of the ethanol-industry audience. That is, 16,700 farms have gone out of business and 6.9 million acres of farmland have come out of production since 2017, he said.

About 150,000 farms sell more than $500,000 in annual profit, Vilsack said, representing about 89% of farm income in the U.S. More than 92% of all farms, he said, share the other 11% of income.

The ethanol industry has been calling on the EPA and other federal agencies to adopt the Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation, or GREET, model to provide a fair accounting of the carbon footprints of biofuels including SAF.

Biofuels groups in general support the use of GREET because it includes all the latest assumptions about the carbon performances of those fuels.

Vilsack said USDA is doing what it can to make sure the model is ready for use by the U.S. Treasury Department to draft regulations for SAF tax credits.

"So, we're working on the modeling to make sure that there's a broad array of feedstocks that can qualify including ethanol," he said.

"We're spending our resources at USDA to make sure the GREET model is where it needs to be. We're working collaboratively with all the agencies that have to be worked on to make sure that we have a unified approach on this." READ MORE