Biden administration's initial SAF subsidy model to raise climate hurdle for ethanol
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, two sources familiar with the matter told Reuters. Under the preliminary model, which could be released by May 15, ethanol is not expected to automatically qualify as a feedstock in the SAF subsidy program unless the corn involved is sourced from farmers using one of just three sustainable agriculture techniques, the sources said. Those techniques include efficient tilling, use of cover crops and efficient fertilizer application, the sources said. White House officials, the final arbiter of the model, had considered forcing producers to use all three techniques in a none-or-all approach, but have backed off that plan, the sources said. The ethanol industry had expected a broader range of agriculture techniques to be included in the model to help the fuel qualify. The sources said the model could be expanded to include a broader range of options when the administration considers a rule establishing the Clean Fuel Production Credit, or 45Z, later this year. The White House had been reluctant to immediately expand the options amid intense debate over how to verify that farms are actually doing the practices and whether they deliver the carbon reduction as promised. The issue has thrust the White House into the complicated politics of ethanol and biofuels in an election year. Subsidies for such products are hugely popular in some Midwestern swing states, but converting farm land to help generate fuel, not food, angers environmentalists. To access SAF subsidies, producers must demonstrate their feedstock is 50% lower in emissions than jet fuel. Ethanol is expected to miss the 50% threshold after environmental penalties for converting land for fuel, something that would force the industry to rely on smart agriculture practices to get back above the credit threshold.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2024-04-08/general/biden-administrations-initial-saf-subsidy-model-to-raise-climate-hurdle-for-ethanol
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Biden administration's initial SAF subsidy model to raise climate hurdle for ethanol
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, two sources familiar with the matter told Reuters. Under the preliminary model, which could be released by May 15, ethanol is not expected to automatically qualify as a feedstock in the SAF subsidy program unless the corn involved is sourced from farmers using one of just three sustainable agriculture techniques, the sources said. Those techniques include efficient tilling, use of cover crops and efficient fertilizer application, the sources said. White House officials, the final arbiter of the model, had considered forcing producers to use all three techniques in a none-or-all approach, but have backed off that plan, the sources said. The ethanol industry had expected a broader range of agriculture techniques to be included in the model to help the fuel qualify. The sources said the model could be expanded to include a broader range of options when the administration considers a rule establishing the Clean Fuel Production Credit, or 45Z, later this year. The White House had been reluctant to immediately expand the options amid intense debate over how to verify that farms are actually doing the practices and whether they deliver the carbon reduction as promised. The issue has thrust the White House into the complicated politics of ethanol and biofuels in an election year. Subsidies for such products are hugely popular in some Midwestern swing states, but converting farm land to help generate fuel, not food, angers environmentalists. To access SAF subsidies, producers must demonstrate their feedstock is 50% lower in emissions than jet fuel. Ethanol is expected to miss the 50% threshold after environmental penalties for converting land for fuel, something that would force the industry to rely on smart agriculture practices to get back above the credit threshold.<br/>
