The Biden administration will release a preliminary climate model for its sustainable aviation fuel (SAF) subsidy program in forthcoming weeks that is more stringent than what the corn-based ethanol industry had anticipated, Reuters said on Saturday citing two sources familiar with the matter.
According to the preliminary report, which is expected to be released by May 15, Reuters reported that ethanol will likely qualify as a feedstock under the SAF subsidy program if the corn is sourced from farmers using one of three sustainable agriculture techniques.
The agriculture techniques under the program include inefficient tilling, use of cover crops and efficient fertilizer.
The ethanol producers, who saw the nascent SAF industry as an opportunity for growth, had expected a broader range of techniques to be included under the model to help the fuel qualification.
The White House, however, remains hesitant to expand the range of sustainable agricultural practices amid the heated debate over processes to verify whether farms are actually using these practices and whether they deliver the carbon reduction promised.
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Reuters sources said the model could expand 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 politics of biofuels have put the White House in a spot during the election year. Subsidies for such products are hugely popular in some Midwestern swing states, but converting farmland to help generate fuel has angered environmentalists.
To access SAF subsidies, producers must demonstrate that 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, which would force the industry to rely on smart agriculture practices to get back above the credit threshold.
Environmentalists are sceptical of the carbon reduction benefits of innovative agriculture practices and have been pushing the White House to limit their value in the model.
The Biden administration wants SAF to play a vital role in decarbonizing the transportation sector and included a $1.25 per gallon tax credit for its production in the 2022 Inflation Reduction Act. The administration hopes the tax credit will generate 3 billion gallons of production of sustainable aviation fuels by 2030.