IRS to decide the future of low-carbon aviation fuel

BY EMILY SKOR, CEO Growth Energy

Launched in 2021, the Biden administration’s Sustainable Aviation Fuel Grand Challenge aims to produce enough low-carbon jet fuel to slash aviation emissions in half by 2050.

Thanks to new incentives created by the Inflation Reduction Act (IRA), that goal appears much more attainable than it did two years ago. However, getting there will require the Internal Revenue Service (IRS) to take a page from the Department of Energy (DOE) when it comes to following the best available science on climate modeling.

Currently, farm-based feedstocks – including bioethanol and corn oil, among others – are the only viable sources of clean, renewable energy available in large enough volumes to meet projected demand for sustainable aviation fuel (SAF). In fact, the U.S. ethanol industry accounts for more than 80 percent of biofuel production capacity in the United States at 17.4 billion gallons per year.

Unfortunately, a handful of interest groups have been encouraging the U.S. Treasury to decide who can earn credit for making SAF based on an emissions model based in Europe. Not only does that outdated model ignore years of data about U.S. agriculture and biofuel production – it also effectively blocks American farmers from participating in a major new market for green energy.

This means that this effort to decarbonize aviation would be hugely dependent on foreign feedstocks. One of the best things about biofuels is that they increase America’s energy independence and reduce our reliance on foreign resources. Choosing this European model would effectively do the opposite.

There is a better way. The DOE and Argonne National Laboratory have invested decades into building the world’s best tool for modeling transportation emissions. It’s called the Greenhouse Gases, Regulated Emissions, and Energy Use in Technologies (GREET) model. GREET was created by researchers with real-world expertise examining both the domestic agricultural supply chain and the latest hard data from the USDA and the U.S. Environmental Protection Agency. The gold standard for lifecycle modeling, GREET harnesses the latest data on everything, including yield, fertilizer and agriculture inputs.

In fact, several provisions of the IRA specifically require the use of GREET to calculate the benefits of other transportation fuels, such as hydrogen and non-aviation low carbon fuels. Unfortunately, the legislation didn’t offer the same clear guidance on SAF – an omission that could keep U.S. SAF production grounded for good.

Leaders at the U.S. Treasury could easily avoid that outcome by relying on the GREET model, which would incentivize further emissions reductions and advance the IRA’s climate goals.

Lawmakers agree. A bipartisan coalition of 16 senators recently warned Treasury Secretary Janet Yellen that, “failure to provide businesses with the certainty and reliability of a science-based, United States government developed model to determine eligibility for IRA tax credits could have dire consequences. Prohibiting the aviation industry from decarbonizing with the most readily available SAF options will not only prevent American farmers from contributing to a clean energy economy, but it will drastically delay adoption of promising low emission energy sources and force the aviation industry to miss an opportunity to eliminate millions of tons of carbon emissions in the coming years.”

In short, it would be climate malpractice to anchor our SAF ambitions to outdated, foreign models that disregard U.S. innovations in biofuel production and climate-smart agriculture and tie U.S.-based carbon incentives to inaccurate foreign carbon models.

In short, it would be climate malpractice to anchor our SAF ambitions to outdated, foreign models that disregard U.S. innovations in biofuel production and climate-smart agriculture and tie U.S.-based carbon incentives to inaccurate foreign carbon models.

The biofuels industry is already lowering carbon emissions, reducing our reliance on foreign oil, saving drivers money at the pump, and creating new American jobs. And by following the best available science, bioethanol can clear the way for America’s bioeconomy to deliver even greater progress toward low-carbon aviation.