In a collaborative effort, prominent U.S. airlines and aviation companies have teamed up with ethanol producers to address the Biden administration, advocating for a regulatory alteration that would simplify the qualification process for federal subsidies for sustainable aviation fuel (SAF) derived from corn-based ethanol.
The backdrop to this development is the Inflation Reduction Act, a cornerstone of President Joe Biden's climate legislation, which mandates SAF producers to demonstrate a 50% reduction in emissions over traditional gasoline, employing an emissions model endorsed by the International Civil Aviation Organization (ICAO) or a similar methodology to secure the aforementioned subsidies.
Notable airlines such as Delta, JetBlue, and Southwest, alongside industry giants like GE Aerospace and Boeing, have jointly issued a letter to Treasury Secretary Janet Yellen, urging the administration to consider the Department of Energy's Greenhouse Gases, Regulated Emissions, and Energy Use in Technologies (GREET) model as a valid alternative to the ICAO model. This request aligns with the sentiments of the ethanol industry, which asserts that the GREET model is more likely to substantiate the required climate benefits necessary for Inflation Reduction Act (IRA) subsidies.
Conversely, environmental advocacy groups argue that the GREET model underestimates the emissions associated with ethanol production, particularly those linked to land clearance for crop cultivation.
The joint letter underscores the potential for market-driven initiatives to facilitate the decarbonization of aviation while fostering innovation and clean energy job growth in the United States. Nevertheless, it acknowledges the inherent complexity in modeling uncertainties, which require long-term solutions.
The letter enjoys the support of ethanol industry leaders, including Poet and Archer-Daniels-Midland Co.
This development coincides with President Biden's administration launching a two-week focus on rural America, commencing with a visit to Minnesota. The final decision on the modeling issue ultimately rests with the Treasury Department, though input has been sought from the agriculture, environment, and energy departments, with the White House also intervening to mediate, as previously reported by Reuters.
In September, the U.S. Department of Agriculture (USDA) announced its intention to update the GREET model, aiming to ensure that ethanol qualifies as a viable feedstock for sustainable aviation fuel.