A coalition of industry groups representing producers of biodiesel, renewable diesel, and sustainable aviation fuel (SAF) have urged the federal government to allow SAF producers to use a domestic emissions model as an alternative to the international model recommended by Congress in a tax credit scheme for the fuel.
The letter, written by leaders of the Clean Fuels Alliance America, the American Soybean Association, the National Oilseed Producers Association, and the U.S. Canola Association, emphasizes the need to recognize the U.S. Department of Energy’s Argonne National Laboratory’s Greenhouse Gas and Regulated Emissions and Energy Use in Transportation (GREET) model as a method for gauging the relative carbon intensity of SAF. The industry groups argue that the international model, used by the International Civil Aviation Organization (ICAO), relies on outdated and inaccurate farming practices data that could exclude SAF made from crops like soybean and canola oil from qualifying for the tax credit.
The tax credit for SAF, established in the Inflation Reduction Act of 2022, provides a scaling reward system based on emissions reductions. However, the more rigorous international model could prevent many SAF producers using first-generation feedstocks from accessing the scaling reward system. The industry groups warn that this could jeopardize investments in SAF production made in recent years.
The biofuels industry has been pushing for the recognition of the GREET model since the signing of the Inflation Reduction Act. While the Treasury is currently completing its guidance for the tax scheme, Secretary of Agriculture Tom Vilsack recently announced that his agency would invest in the analysis of the GREET model, providing some reassurance to industry proponents.
The final decision regarding the adoption of the domestic emissions model is expected to be made by the end of the year. This development marks an important step towards supporting homegrown biofuels and advancing the transition to a low-carbon future.
Sources: Clean Fuels Alliance America, American Soybean Association, National Oilseed Producers Association, U.S. Canola Association, U.S. Department of Energy’s Argonne National Laboratory, Internal Civil Aviation Organization