In a move aimed at lowering the greenhouse gas emissions of air travel, the Biden administration on Tuesday issued new guidelines for how fuel producers — and in particular, makers of ethanol from corn — could qualify for tax credits under a plan to increase the supply of so-called sustainable aviation fuel.
It’s especially difficult to transition airplanes away from traditional jet fuel because there are so few affordable alternatives capable of getting a plane off the ground. The global aviation sector accounts for about 3 percent of the world’s total emissions, and most jet fuel today is made from fossil fuels.
The proposed guidelines could have major implications for corn-producing states. The guidelines offer incentives for farmers to use climate-friendly methods to grow the crops, such as corn or soy, that are used in alternative fuels like ethanol.
President Biden’s 2022 Inflation Reduction Act offered federal tax credits for sustainable aviation fuels, industry jargon for jet fuel made without fossil fuels, that cut greenhouse gas emissions by at least 50 percent. For months now, federal officials have been evaluating research to decide how to measure whether various biofuel-based alternatives meet that standard.
Sustainable aviation fuel is already occasionally blended into traditional jet fuel, albeit at small, single-digit percentages. That scale is well below the government’s target of 3 billion gallons per year by 2030. Currently, most of it is made out of used cooking oil, and it costs two to four times as much as jet fuel.
Nearly 40 percent of U.S. corn production already goes into the distillation of ethanol fuel, which is blended into gasoline. And while ethanol could feasibly be blended with jet fuel now, uncertainty over how its production could meet stringent carbon-emissions and land-use requirements have prevented its inclusion in the mix. Corn production is also water intensive, and a New York Times investigation last year found that, in some places, it draws on sensitive aquifers.
Biden Administration officials introduced a new pilot program for corn ethanol to be used as jet fuel that could qualify for tax credits if certain climate-friendly farming practices were used in combination. They include no-till farming, which minimizes erosion, and covering the soil with crops that leave behind organic matter in the dirt. The program sets out similar guidelines for soy.
The new formula for claiming the tax credits — which spans 40 pages, is highly technical and must still be finalized — would also consider whether producers use carbon capture and storage, low-emissions natural gas, and renewable electricity in their processes.
“Incentives in the law are helping to scale production of low-carbon fuels and cut emissions from the aviation sector, one of the most difficult-to-transition sectors of our economy,” Treasury Secretary Janet L. Yellen said in a news release.
Secretary of Agriculture Tom Vilsack said the guidelines acknowledged “the important role farmers can play in lowering greenhouse gas emissions and begins to reward them through that contribution in the production of new fuels.”
Environmental groups have been skeptical that some of the practices detailed in the new guidelines are as beneficial to thwarting climate change as government officials say they are. Mark Brownstein, a senior vice president at the Environmental Defense Fund, said he was reviewing the proposed guidelines but that “we are concerned this decision may have missed the mark.”
The powerful corn and ethanol industries had been watching the Biden administration’s announcement closely to understand just how much corn farmers and ethanol producers would have to adapt, and how much detailed record-keeping would be required, to take advantage of the tax credits.
“We of course understand there will be a level of stringency needed,” said Geoff Cooper, president of the Renewable Fuels Association, a leading ethanol lobby group. “It’s a balancing act. And there is no way the U.S. produces 3 billion gallons by 2030 unless corn ethanol is part of that picture.”
While the United States has set ambitious targets for production, building a supply chain will take years. Not one large-scale sustainable aviation fuel plant exists in the United States yet. The Biden administration’s stated goal is to grow production rapidly so it can satisfy all domestic jet fuel demand by 2050.
Europe is at least slightly ahead. The European Union is set to introduce a blending mandate requiring airports to supply jet fuel at 2 percent blends from 2025.
Ethanol producers are looking for a new outlet for their product as electric-vehicle usage cuts into gasoline demand. And with national elections in the United States set for November, politicians can benefit from broadening incentives that are politically popular in Corn Belt states.
On Monday, major airlines including American, Alaska, Hawaiian, JetBlue and United announced a partnership with dozens of other organizations including agricultural enterprises, aircraft makers, airports, labor unions and biofuel producers that aims to scale up sustainable aviation fuel production. The group “believes in the importance of ethanol as a tool to help our industry decarbonize,” said Lauren Riley, the chief sustainability officer at United Airlines.