The Biden administration has released guidance on its sustainable aviation fuel (SAF) subsidy program, which will allow corn-based ethanol to qualify for the subsidies if it is sourced from farms using climate-friendly growing techniques.
The plan is likely to be welcomed by the politically powerful U.S. ethanol industry, which has been eager to secure these subsidies. However, the industry had hoped for a lower bar for eligibility.
To access the SAF subsidies that make it economically viable to produce, refiners must demonstrate that their fuel is at least 50% lower in emissions than petroleum jet fuel. The guidance states that ethanol-based SAF can meet this threshold, but only if corn farmers use a bundle of agriculture practices that include no-till, cover cropping and efficient fertilizer application to hold carbon in the soil.
Soy-based biodiesel will also qualify if the soy farms use a combination of no-till and cover cropping.
The SAF subsidies amount to $1.25 per gallon for fuels that hit the 50% emissions reduction threshold, and up to $1.75 per gallon for those that exceed it.
The Renewable Fuels Association industry group said it was encouraged by the announcement, but believes the program should be more flexible and allow for additional low-carbon technologies and practices.
Some environmental groups and researchers are concerned that the SAF strategy will not deliver the promised climate gains, in part because of scientific uncertainty about the benefits of no-till or cover crop farm techniques and the sheer volumes of fuel that will be required to decarbonize aviation.
The Biden administration, however, is confident in the plan, with Bill Hohenstein, director of USDA’s Office of Energy and Environmental Policy, stating that the administration has “robust data, analysis, information and modeling that all supports the conclusions that these practices do have greenhouse gas benefits.”