Sustainable Aviation Fuel

• Under the Inflation Reduction Act, the sustainable aviation fuel (SAF) tax credit is only eligible when the biomass/feedstuff was raised in a way that had at least a 50% reduction in greenhouse gas emissions.  

• Argonne GREET (Greenhouse gases, Regulated Emissions, and Energy use in Technologies) model requires corn and soybeans to meet climate smart practices such as no-till, use of cover crops, and enhanced efficiency fertilizer. 

• There will be a more than one-million-bushel loss of corn each year if this market is not available for American-grown corn.  

• The Environmental Protection Agency’s data show that approximately 5 million gallons of SAF were consumed in 2021, 15.84 million gallons in 2022, and 24.5 million gallons in 2023. 

1. Do farmers in your county grow commodities which would meet the SAF tax credit standards? 
2. Would farmers in your county be willing to alter production practices to meet SAF standards? 
3. How should Farm Bureau policy be updated to reflect this issue?

The Argonne GREET model sets the requirements for corn and soybeans grown under climate smart practices to meet the tax credit requirements.  This model is used by both the Department of Energy (DOE) and the United States Treasury to determine the impact and reward of these tax credits. These requirements offer incentives to farmers to reduce their carbon output; however, farmers and ranchers should not be penalized for not being able to be fully climate smart in their production. This model was created in 1995 as a tool to evaluate the lifecycle analysis of technologies or products, meaning it predicts the environmental impact of industries. While this model has hope, there are still obstacles in the way of this being practical for producers. According to American Farm Bureau, efforts are underway to update these GREET model standards. Click HERE for more information about GREET models. 

The DOE states GREET can calculate: 

• Total energy consumption (non-renewable and renewable)  

• Fossil fuel energy use (petroleum, natural gas, coal) 

• Greenhouse gas emissions  

• Air pollutant emissions  

• Water consumption 

Producers will be limited by their location, climate, and soil types. Not every practice applies to every operation resulting in winners and losers. This also opens the door for other countries to enter the market, thus cutting out American producers. The current tax credit, 40B for 2024, came at a time which is inconsistent with grower’s planting schedule, thus they are not eligible for this year’s credit. However, there is hope there will be continued conversation regarding the flexibility which reflects the added eligibility for row crops. With upcoming 45Z credits, there is a chance for real impact to be seen in using American-grown commodities in the production of SAF.   

Currently, used cooking oil out of China is being imported at an exponential rate. Because it is considered a pure waste product, the used cooking oil can score favorably in climate models. What this means for the economy is used cooking oil that already had a place in the country of origin’s market is now being imported to the United States for a tax credit and government payments. Another instance of American-grown commodities falling behind imports is Brazilian sugar ethanol, as it is the only current affordable option. The only SAF refining plant producing jet fuel from ethanol in the United States is based on sugar ethanol from Brazil.  

Limiting American-grown products from qualifying based on their carbon footprint has led to outsourcing from other countries, thus negatively impacting American farmer’s profits. If American-grown products do not qualify for SAF standards, this further exasperates the issue of declining demand for corn as an increase of electric vehicles leads to decreases in the demand for ethanol. SAF could open unprecedented demand for American-grown commodities. In 2005, the Renewable Fuel Standard created a growth in ethanol demand and increased the need for corn. In 2021, the Biden Administration announced the goal of increasing SAF production to three billion gallons by 2030. Without expanding markets like SAF production, experts say corn producers are projected to lose demand.  According to the Environmental Protection Agency’s Multipollutant Emissions Standards, by 2032 56% of light-duty vehicles sold be plug-in-electric and 13% hybrid-electric vehicles. National Corn Growers Association Lead Economist Krista Swanson said the rule will create an annual loss of more than one-billion bushels of corn by 2041. 

Farm Bureau should aggressively support any legislation that provides favorable economic conditions to expand the ethanol and biodiesel industry and increase the Renewable Fuels Standard. As production of ethanol and biodiesel expands in the coming years, Farm Bureau should make every effort to support the availability of these products at the retail level. 

American Farm Bureau
402 / Energy 

7. We urge Congress and the administration to enact policies that will:

7.10. Support further development of nuclear, solar, geothermal, bio-based, hydroelectric, oil shale, tar sands, wind and other sources of energy and recommend that special emphasis be given to converting to expanded use of coal, including gasification, liquefaction, and ethanol production; 

2. Biofuels 

2.1.4. Legislation requiring the production of clear gasoline that would accommodate year-round blending with ethanol in all fuels; 

455 / Agricultural Reports  

2. We support:

2.8. Regularly collecting and reporting of NASS data on the production and use of ethanol co-products used for livestock feed and the replacement percentage of corn exports with dried distiller’s grains.