Clean Fuels and Soy Growers React to SAF Guidance

Cindy Zimmerman

Clean Fuels Alliance America welcomed updates to the GREET model released this week for calculating 2023-2024 sustainable aviation fuel (SAF) blender tax incentives (§40B).

For the first time, these updates recognize the carbon benefits of some of the climate smart agriculture practices that U.S. farmers are already utilizing. However, Clean Fuels urges USDA and Treasury to further update the GREET model to include additional climate smart agriculture practices specific to oilseed crops and quickly finalize rules for the 2025-2027 tax incentives (§45Z Clean Fuel Production Credit), which will support U.S. biodiesel, renewable diesel, and SAF producers.

The American Soybean Association is concerned that the strict guidance could prove to be prohibitive to Northern soy states since the required no till and cover cropping are feasible only for soybean farmers in certain parts of the country.

ASA president Josh Gackle grows beans in Kulm, North Dakota. “For growers like me here in North Dakota, short growing seasons and unpredictable fall weather make the cover crop requirement alone next to impossible. Growers in the Northern Plains do so when possible,” said Gackle. “However, employing both no till and cover cropping is contrary to what Mother Nature will allow, no matter what the guidance specifies.”

ASA, aviation biofuels, Biodiesel, biofuels, Clean Fuels Alliance, SAF, Soybeans

Ethanol Industry Reacts to SAF Guidance

Cindy Zimmerman

Now that the 40B sustainable aviation fuel (SAF) tax credit guidance and modified GREET model has been released, the ethanol industry may have scored a ticket to fly but there’s still a few mechanical problems to sort out before take off.

The new 40B GREET model will recognize GHG reductions from carbon capture and sequestration (CCS), renewable natural gas, and renewable power used to produce ethanol for qualifying SAF and include a “safe harbor” pilot program for corn ethanol produced with bundled climate-smart agriculture (CSA) practices.

Renewable Fuels Association President and CEO Geoff Cooper says they view this as a starting point. “We are encouraged that, for the first time ever, this carbon scoring framework will recognize and credit certain climate-smart agricultural practices. We’re also pleased to see the integration of other carbon reduction strategies—like renewable process energy and carbon capture and sequestration—into the model. However, RFA believes less prescription on ag practices, more flexibility, and additional low-carbon technologies and practices should be added to the modeling framework to better reflect the innovation occurring throughout the supply chain.”

American Coalition for Ethanol (ACE) CEO Brian Jennings says while the announcement a step in the right direction, it’s not likely to make a difference this year. “With the 2024 planting season underway and the expiration of the 40B credit on December 31, 2024, Treasury’s SAF guidance speaks more to the Administration codifying the important role CSA practices play in decarbonizing liquid fuels than the amount of ethanol-to-jet that will qualify for the 40B credit,” said Jennings. “Ultimately, we need to enable farmers and ethanol companies to recoup value from these tax credits for their investments to reduce GHG emissions.”

Jennings says ACE is leading USDA-funded Regional Conservation Partnership Program (RCPP) projects that will generate scientifically significant datasets of the GHG reduction benefits of CSA practices used to produce ethanol in various regions across the country. “We look forward to continued engagement with Treasury, USDA and DoE with respect to how the GREET model will apply to 45Z, which will not require bundling of CSA practices,” said Jennings.

Learn more in this interview:
ACE CEO Brian Jennings on SAF tax credit guidance 15:40

ACE, Audio, aviation biofuels, Carbon, corn, Ethanol, Ethanol News, Renewable Fuels Association, RFA, SAF

Treasury Releases Guidance for SAF Credit

Cindy Zimmerman

Late Tuesday afternoon the U.S. Department of the Treasury and Internal Revenue Service (IRS) finally released guidance on the Sustainable Aviation Fuel (SAF) Credit established by the Inflation Reduction Act (IRA).

The guidance released today will “catalyze innovation in the aviation industry and incentivize the production of cleaner and more sustainable aviation fuels,” said U.S. Treasury Secretary Janet Yellen during a House Ways and Means Committee hearing.

US Treasury Secretary Janet Yellen 1:04

Tuesday’s announcement includes the new 40B SAF-GREET 2024 model that provides another methodology for SAF producers to determine the lifecycle GHG emissions rates of their production for the purposes of the SAF Credit. The modified GREET version incorporates new data, including updated modeling of key feedstocks and processes used in aviation fuel and indirect emissions, as well as integrates key greenhouse gas emission reduction strategies such as carbon capture and storage, renewable natural gas, and renewable electricity.

Importantly, the notice also incorporates a USDA pilot program to encourage the use of certain Climate Smart Agriculture (CSA) practices for SAF feedstocks to lower overall GHG emissions and increase adoption of farming practices associated with environmental benefits such as improved water quality and soil health.

For corn ethanol-to-jet, the pilot provides a greenhouse gas reduction credit if a “bundle” of certain CSA practices (no-till, cover crop, and enhanced efficiency fertilizer) are used. It similarly would allow a greenhouse gas reduction credit for soybean-to-jet if the soybean feedstock is produced using a “bundle” of applicable CSA practices (no-till and cover crop). This is a pilot program specific to the 40B credit, which is in effect for 2023 and 2024.

To credit CSA practices in the Clean Fuel Production Credit (45Z), which becomes available in 2025, the agencies will do further work on modeling, data, and assumptions, as well as verification. A new 45Z-GREET will be developed for use with the 45Z tax credit.

Ethanol stakeholders are pleased with the announcement, but say it is only a first step in resolving the path forward. “Today’s guidance and modified GREET model help position ethanol-based SAF for takeoff, but more work is needed to fully clear the runway and get this opportunity off the ground,” said Renewable Fuels Association President and CEO Geoff Cooper.

Audio, aviation biofuels, biofuels, biojet fuel, corn, Ethanol, Ethanol News, SAF

Trade Groups Urge EPA to Meet 2026 RFS Volumes Deadline

Cindy Zimmerman

Clean Fuels Alliance America and other trade associations representing feedstock providers, advanced biofuel producers, and low-carbon fuel customers are urging the Environmental Protection Agency to propose and finalize 2026 Renewable Fuel Standard volumes by this November’s statutory deadline.

In a letter to EPA Administrator Michael Regan, the nine organizations highlighted the dramatic drop in the value of RFS compliance credits (or RINs) in response to EPA’s unreasonably low 2023 -2025 volumes EPA set last year. The situation prompted several production facilities to close and now threatens investments in feedstock processing capacity as well as production of sustainable aviation fuel, according to the association letter.

“Each of our industries are committed to reducing greenhouse gas emissions, and we recognize that sustainable biofuels offer some of the most substantial immediate benefits to deliver carbon reductions. The EPA should utilize the RFS to improve energy security, bolster domestic industry and manufacturing, and maintain America’s leadership in developing and using sustainable, clean transportation technologies,” the associations write. “While our industries will continue to make investments in producing, distributing, and using low-carbon fuels, EPA can and should send a strong signal to the market through robust RVOs.”

“Transportation industries are looking for low-carbon solutions – particularly for heavy-duty engines – and clean fuels producers and feedstock suppliers are coordinating to deliver those solutions,” added Kurt Kovarik, Vice President of Federal Affairs with Clean Fuels. “We are united in asking EPA to use the Renewable Fuel Standard to drive growth in the market, achieve significant near-term greenhouse gas emission reductions, and support the investments we’ve made. EPA must act in a timely manner on the 2026 RFS volumes to keep the program on track.”

Joining Clean Fuels in sending the letter are American Short Line and Regional Railroad Association, American Soybean Association, American Trucking Associations, Association of American Railroads, National Energy & Fuels Institute, National Oilseed Processors Association, North American Renderers Association, and U.S. Canola Association.

Read more from Clean Fuels Alliance America

aviation biofuels, Biodiesel, biofuels, Clean Fuels Alliance, EPA, Soybeans

Sustainable Aviation Fuel Stakeholders Form SAF Coalition

Cindy Zimmerman

With new guidance expected Tuesday on what will qualify for sustainable aviation fuel (SAF) tax credits, a new coalition of SAF stakeholders was announced Monday in an effort to to “accelerate the development and deployment of sustainable aviation fuels.”

The Sustainable Aviation Fuel (SAF) Coalition consists of over 40 companies and organizations that hold a stake in the development and deployment of sustainable aviation fuel, including airlines and aircraft operators, agricultural enterprises, aircraft and aircraft equipment manufacturers, airports, technology developers, labor unions and biofuel producers.

“SAF will enhance domestic energy security, create new markets for American farmers, reduce aviation emissions and drive next-generation technology development,” said Alison Graab, Executive Director, SAF Coalition. “The membership of this coalition shows the deep support that SAF enjoys across aviation’s many stakeholders. Federal policies that support and increase SAF production will create jobs, spur innovation, reduce the environmental impacts of jet fuel, and enhance American energy security.”

Members of the coalition include names such as American Airlines, Gevo, LanzaJet, Renewable Fuels Association (RFA), and Summit Agricultural Group.

“Expanding the availability of sustainable aviation fuel is an important part of decarbonizing the transportation sector, and the U.S. ethanol industry stands ready to play a vital role in this transition,” said RFA President and CEO Geoff Cooper. “The SAF Coalition’s diverse membership is a reflection of the exciting future that lies ahead for the renewable fuels industry and our partners up and down the supply chain.”

aviation biofuels, biofuels, biojet fuel, Ethanol, Ethanol News, Renewable Fuels Association, SAF

GREET Model Update Expected Tuesday

Cindy Zimmerman

The Biden administration is expected to finally release on Tuesday the long-awaited update to the GREET model to determine eligibility for feedstocks to make sustainable aviation fuel (SAF), according to news reports.

Secretary of Agriculture Tom Vilsack was in Michigan last week with House Agriculture Committee Member Elissa Slotkin to discuss various issues, including the pending GREET model changes. Brownfield Ag News reports Vilsack says the model is expected to “serve as a placeholder in the 40B tax credit which applies to a small amount of the fuel in production this year.”

“There’s a 45Z credit, which is a pretty good credit, it provides quite the financial incentive to produce this fuel,” he says. “To qualify for that, I’m confident there will be climate-smart agricultural opportunities.”

Vilsack also stressed the importance of waiting for the announcement to be released rather relying on rumor because it is the Treasury Department issuing it, not the EPA.

aviation biofuels, Carbon, EPA, Ethanol, Ethanol News, USDA

RFA CEO Honored as Patriotic Employer

Cindy Zimmerman

Renewable Fuels Association (RFA) President and CEO Geoff Cooper, an Army veteran, was honored this week by the Department of Defense Employer Support of the Guard and Reserve office “for contributing to national security and protecting liberty and freedom by supporting employee participation in America’s national guard and reserve force.”

Under Cooper’s leadership, RFA last year founded Veterans for Renewable Fuels to provide veteran employees in the ethanol industry opportunities to come together and support each other in their careers and personal lives. According to a Department of Energy report, the percentage of ethanol industry workers who are veterans is 15 percent, which is triple that of the national workforce and higher than the petroleum fuels and general energy workforce.

“When women and men in uniform leave the military and start searching for jobs, they want more than a paycheck,” says Cooper. “Thousands of veterans have found exactly what they’re looking for in the ethanol industry, and we are truly honored to have them in our midst.”

Ethanol, Ethanol News, Renewable Fuels Association, RFA

SAF Stakeholders Call for Farm Bill Provisions

Cindy Zimmerman

Industry stakeholders representing nearly the entire supply chain for Sustainable Aviation Fuel (SAF) are calling on House and Senate Agriculture Committee leaders to include provisions in the Farm Bill to boost the role of American farms in fueling low-carbon aviation.

“SAF, which can be produced from renewable biomass and agriculture-based feedstocks, presents an opportunity to expand U.S. markets for agricultural goods, bolster our nation’s rural economy and provide a renewable, low-emission domestic energy supply for the aviation sector,” they said in a letter. “Due to wide bipartisan, bicameral support in Congress, as well as benefits to U.S. farmers, biofuel producers and the aviation industry, we ask that you include meaningful SAF provisions, such as the Farm to Fly Act, in the Farm Bill to strengthen American agriculture and help leverage this key resource.”

The letter was signed by the Aerospace Industries Association, Airlines for America, Airbus, Alaska Airlines, American Airlines, the American Soybean Association, Atlas Air Worldwide Holdings, Inc., Boeing, the Cargo Airline Association, Clean Fuels Alliance America, Delta Air Lines, FedEx Express, Fuels America, GE Aerospace, US, the General Aviation Manufacturers Association, Gevo, Inc., Growth Energy, Hawaiian Airlines, JetBlue Airways, the Kansas Corn Growers Association, the Kansas Grain Sorghum Association, the Kansas Soybean Association, Marquis Sustainable Aviation Fuel, the National Air Carrier Association, the National Air Transportation Association, the National Business Aviation Association, the National Corn Growers Association, Novonesis, the Ohio Corn & Wheat Growers Association, the Ohio Soybean Association, POET, LLC, the Renewable Fuels Association, Southwest Airlines, United Airlines, United Parcel Service, and Vertical Aviation International.

Ag group, aviation biofuels, Biodiesel, biofuels, Ethanol, Ethanol News, Renewable Fuels Association, RFA

Nebraska Governor Signs SAF Tax Credit Bill

Cindy Zimmerman

Nebraska Gov. Jim Pillen has signed into law the establishment of a production tax credit for sustainable aviation fuel (SAF) in Nebraska.

The SAF tax credit (LB937) will provide a $0.75 per gallon tax credit for the production of aviation fuel that reduces lifecycle emissions by at least 50 percent, which may be calculated based on the most recent version of Argonne National Laboratory’s GREET model.

“We are excited and encouraged by this landmark SAF legislation, and Gov. Pillen’s signing of the bill,” Nebraska Ethanol Board (NEB) Executive Director Reid Wagner said. “This bill creates a first-in-the-Midwest tax credit for SAF to be produced right here in Nebraska. We thank Sens. Dungan and Bostar for helping develop SAF production, which represents a tremendous opportunity for our state moving forward.”

Ethanol and oils from corn and soybean processing serve as low-carbon, low-cost feedstocks for the production of SAF, which can reduce emissions by more than 50% compared to conventional jet fuel. LB937 establishes an income tax credit for the production of SAF beginning in 2027.

aviation biofuels, Ethanol, Ethanol News, SAF

Indigo Ag and Red Trail Energy Partner for Low CI Corn

Cindy Zimmerman

Sustainable agriculture company Indigo Ag and North Dakota bioethanol producer Red Trail Energy (RTE) have announced a collaboration to source low carbon intensity (CI) corn to support farmers using sustainable practices and benefit from emerging clean fuels market tax credit programs.

Utilizing Indigo’s proven measurement, reporting and verification (MRV) and remote sensing capabilities, RTE will work with Indigo Ag to measure field level carbon intensity (CI) and identify, enroll and verify farmers with the highest potential to produce low CI feedstock. Indigo Ag will produce the data required for tax credit compliance, including data collection, verification and analysis of eligible practices in GREET and other clean fuel calculators. This level of data collection will enable RTE to maximize benefits from clean fuel markets across the U.S. and Canada, starting with the 45Z tax credit in January 2025.

RTE will be amongst the first ethanol producers to take advantage of the Clean Fuel Production Credit, or 45Z, in January 2025, utilizing 2024 crops. 45Z will pay 2 cents per gallon for every carbon intensity (CI) point reduction below the minimum threshold, and will be the first clean fuels program to enable the generation of credits from lower CI agricultural feedstock in a meaningful way. Sustainable farming practices like cover crops or no till have the potential to lower ethanol CI scores by more than 20 points.

Carbon, corn, Ethanol, Ethanol News