The Biden administration will release a preliminary climate model for its climate subsidy program in the coming weeks. sustainable aviation fuel (SAF) that is more restrictive than corn-based ethanol producers expected, two sources familiar with the matter told Reuters.
The sources said that according to the preliminary model they may release by May 15, ethanol will not automatically qualify as a feedstock in the SAF subsidy program unless farmers using one of the three sustainable agriculture techniques the corn involved comes from.
These techniques include efficient tillage, use of cover crops and efficient application of fertilizers, sources said.
The ethanol industry initially hoped to include a broader range of agricultural techniques in the model to help qualify the fuel. However, this expansion of methods would allow for better adaptation to environmental and sustainability requirements, thus promoting an optimization in the ethanol certification process as a greener fuel.
Sources say that the government may expand options when issuing a final rule this year, expanding the model initially proposed.
Biden wants SAF to help decarbonize transportation by offering a $1.25/gallon tax credit in the Reducing Inflation Act of 2022.
But to secure this subsidy, SAF producers must demonstrate that their fuel has 50% fewer emissions than jet fuel.
Ethanol producers see subsidies in the emerging SAF sector as a key opportunity for fuel market growth. This is amid stagnant demand for gasoline.
Source: Jarrett Renshaw | Agricultural News
