Biden administration SAF details coming by March 1
ACE CEO Brian Jennings sent a letter (link) to members of the SAF Interagency Working Group, urging them to properly value climate-smart agriculture (CSA) and consider real-world land use change (LUC) in their assessment of the Greenhouse Gases, Regulated Emissions, and Energy Use in Technologies (GREET) Model for SAF Lifecycle GHG Emissions under Section 40B of the Inflation Reduction Act.
Accompanying the letter was an analysis (link) by Ron Alverson comparing modeled LUC estimates to real-world data.
The letter was addressed to officials including USDA Secretary Tom Vilsack, DOE Secretary Jennifer Granholm, EPA Administrator Michael Regan, FAA Administrator Michael Whitaker, and Treasury Secretary Janet Yellen. Jennings cautioned that President Biden’s goal of farmers providing 95% of SAF in the next 20 years could be jeopardized if the GREET model artificially inflates LUC and fails to value CSA practices properly.
ACE emphasized the importance of GHG credits for CSA practices, which incentivize on-farm practices to reduce or prevent LUC-related emissions. The letter referenced a USDA decision to provide $25 million for a Regional Conservation Partnership Program led by ACE, aimed at implementing CSA practices across 167 counties in a 10-state region. This initiative seeks to provide data on the GHG effects of conservation practices in different soil types and climates.
ACE urged the Interagency Working Group to ensure that the GREET model provides carbon credits for CSA practices, not only for Section 40B but also for the 45Z clean fuel production credit.
Of note: The Biden administration no later than Friday is expected to release details regarding which products are eligible for SAF tax incentives. EPA Administrator Michael Regan and USDA Secretary Tom Vilsack are both expected to comment on the announcement during appearances at the Commodity Classic this week in Houston.
The Treasury Department said in a statement Dec. 15 (link) that its green jet fuel guidance will include a revised version of the Energy Department’s emissions-measuring method known as GREET, a model for calculating greenhouse gas emissions backed by ethanol makers. The statement said the update “will incorporate new data and science, including new modeling of key feedstocks and processes used in aviation fuel. The updated model will also integrate other categories of indirect emissions like crop production and livestock activity, in addition to best available science and modeling of indirect land use change emissions. The updated model will also integrate key greenhouse gas emission reduction strategies such as Carbon Capture and Storage, Renewable Natural Gas, Renewable Electricity, and Climate-Smart Agriculture Practices.”
Farm-state lawmakers on Feb. 15 wrote a letter (link/pdf) asking the Biden administration to act by March 1. The said the GREET update should: properly credit practices like regenerative farming and carbon capture; ensure valuations of indirect land-use changes recognize contributions of U.S. agriculture; and reward modern practices like precision agriculture that lead to higher per-acre yields.
The corn and equity markets will tell us quickly what they think about the possible watered-down SAF rules and regulations coming from the Treasury Dept. since it is a tax deduction.
More on the SAF credits: The credit incentivizes the production of SAF that achieves a lifecycle greenhouse gas emissions reduction of at least 50% as compared with petroleum-based jet fuel. Producers of SAF are eligible for a tax credit of $1.25 to $1.75 per gallon. SAF that decreases GHG emissions by 50% is eligible for the $1.25 credit per gallon amount, and SAF that decreases GHG emissions by more than 50% is eligible for an additional $0.01 per gallon for each percentage point the reduction exceeds 50%, up to $0.50 per gallon.