The Biden administration is set to unveil a preliminary climate model for its sustainable aviation fuel (SAF) subsidy program that may pose challenges for the ethanol industry. According to sources familiar with the matter, the model is expected to be more restrictive than anticipated, with ethanol likely not automatically qualifying as a feedstock unless specific sustainable agriculture techniques are employed. These techniques include efficient tilling, use of cover crops, and precise fertilizer application. While White House officials initially considered a strict requirement for all three techniques, they have since backed off from this approach.
The ethanol industry had hoped for a broader range of agriculture techniques to be recognized in the model to facilitate fuel qualification. The model’s scope may expand when the administration evaluates a rule for the Clean Fuel Production Credit later this year. However, concerns persist regarding verifying farm practices and their actual carbon reduction impact.
To access SAF subsidies, producers must prove that their feedstock emits 50% less carbon than traditional jet fuel. Ethanol may fall short of this threshold due to environmental penalties associated with land conversion for fuel production. Consequently, the industry may need to rely on advanced agricultural practices to meet emission targets.