According to two people familiar with the situation, the Biden administration is anticipated to disclose a climate model on Tuesday for its sustainable aviation fuel (SAF) subsidy program, as reported by Reuters.
According to two people familiar with the situation, the Biden administration is anticipated to unveil a climate model on Tuesday for its sustainable aviation fuel (SAF) subsidy program, according to a Reuters story published on Thursday. The regulation will specify how climate-smart agriculture can be used by ethanol producers to meet the requirements for tax credits in the production of SAF. With the expectation that gasoline usage will fall, the ethanol business sees SAF as a means of increasing demand for its goods in the future.
"The model will chart a path for ethanol producers to qualify for SAF tax credits, seen as a lifeline for the industry," Reuters' Jarrett Renshaw wrote on X (previously Twitter).
What the model anticipates
Early in April, Renshaw reported that "two sources familiar with the matter told Reuters that the Biden administration will release a preliminary climate model for its sustainable aviation fuel [SAF] subsidy program in the coming weeks that is more restrictive than what the corn-based ethanol industry had expected."According to Renshaw, the approach "will make it more difficult for ethanol producers to take part in lucrative new U.S. tax credits for so-called sustainable aviation fuel, seen as crucial to the industry's growth." "If they can collaborate with maize growers that employ sustainable agricultural methods, it will still provide them with a route to the subsidies.”
Renshaw stated in early April that "producers must demonstrate their feedstock is 50% lower in emissions than jet fuel in order to access SAF subsidies." "After environmental penalties for converting land for fuel, ethanol is expected to miss the 50% threshold, forcing the industry to rely on smart agriculture practices to get back above the credit threshold."
"Renewable Fuels Association head Geoff Cooper is anxiously awaiting an answer from EPA and the energy and agriculture departments," the American Ag Network said on Thursday. According to Cooper, "the most recent information we have received from the USDA regarding that is that they anticipate releasing this updated GREET model by the end of the month." We therefore went from March to possibly the beginning of April, and from what we're hearing, the end of April is more plausible.
According to preliminary information provided by Iowa Senator Chuck Grassley, the government might impose strict screening requirements on feedstock soybeans and maize. Cooper states: "We're not sure. I don't think the administration or the USDA have given us all the information about how they plan to track feedstocks, keep an eye on farming methods, and other related tasks. We're still awaiting a few of those crucial elements, according to the American Ag Network.
Ethanol climate model expected next week was originally published by farmdoc.
