close
close
orange

New model takes agricultural practices into account in boosting low-carbon jet fuel

Vaseline

For the first time, the conservation practices of Iowa and other U.S. farmers will be a factor in determining whether renewable jet fuels made from their corn, soybeans and other crops qualify for low-carbon fuel tax credits, the Biden administration said Tuesday.

The U.S. Treasury Department’s announcement focused on an updated model that will be used to determine whether greenhouse gas emissions from the production of sustainable aviation fuel are low enough to allow manufacturers to qualify for a federal tax benefit known as 40 billion.

U.S. Secretary of Agriculture Tom Vilsack said the model is an “important stepping stone” that recognizes “the important role farmers can play in reducing greenhouse gas emissions and begins to reward them through that contribution to the production of new fuels.”

Iowa and U.S. renewable fuel groups say the model is a good starting point, but needs work to integrate a wider variety of conservation practices and improvements in biofuel production. But U.S. Senators Chuck Grassley and Joni Ernst of Iowa, both Republicans, criticized the model, saying it penalizes corn and soybean growers.

In a video, Grassley said the updated model is “a stupid approach” that limits the ability of grain producers to contribute to sustainable aviation fuel.

“Widespread use of sustainable aviation fuel will help combat global warming,” he said. “But turning away from grain feedstocks will hinder efforts to produce that fuel on a commercial scale.”

Renewable Fuels Group Head: Not all required methods work in all locations

The model is expected to guide how farmers and sustainable fuels will be treated when determining qualifications for a more lucrative clean fuel production tax credit, known as 45Z, that will become available next year.

With billions of dollars in incentives on the line, ethanol’s role in the next generation of low-carbon fuel is important for Iowa. The state is the largest producer of corn and ethanol in the country, using about half of the annual harvest to make the renewable fuel.

More: New research shows that Iowa’s legendary soil, the foundation of its economy, is losing its wealth

“This is a great start as we develop new markets for sustainable aviation fuel that use home-grown agricultural crops produced using climate-smart agricultural practices,” Vilsack, a former governor of Iowa, said in a statement.

Connecting farmers’ growing practices with low-carbon fuel markets could also accelerate the adoption of conservation practices that environmentalists have urged farmers to help improve Iowa’s water quality, experts said.

“This will be yet another important incentive that will help farmers in Iowa and across the U.S. adopt these practices that are so important for improving soil health and water quality, in addition to sequestering carbon,” said Sean McMahon, executive director of the Iowa Agriculture Water Alliance, which is supported by Iowa pork, soybean and corn groups.

Monte Shaw, executive director of the Iowa Renewable Fuels Association, said he is concerned that the sustainable jet fuel model recognizes only three practices: the use of cover crops, no-till farming and efficiency in the use of nitrogen fertilizer.

Farmers must apply all three if their crops want to count towards reducing CO2 emissions. But not all of them are effective in every location, Shaw said. Growers in northern Iowa may have difficulty starting cover crops in the fall given their shorter growing season, and the new model doesn’t take into account many other practices that can reduce greenhouse gas emissions, he said.

“What they’ve rolled out is not really practical,” he said. But he added that he is “optimistic that they plan to get many more practices recognized at the agricultural level and not have them all tied up in bundles” as the federal government develops the clean fuel tax credit model.

The controversial use of carbon capture is also part of the tax incentive requirements

The announcement comes at a time when the ethanol industry is facing uncertainty. President Joe Biden’s push to halve greenhouse gas emissions by 2030 and achieve a carbon-free economy by 2050 includes switching from gas-powered vehicles to electric cars and trucks, which could reduce demand for biofuels.

More: Could the push for carbon capture pipelines also generate billions for conservation-oriented agriculture?

Geoff Cooper, the Renewable Fuels Association, said converting ethanol into jet fuel is “one of the most promising forms” of sustainable jet fuel.

“Low-carbon ethanol… is cost-competitive with petroleum-based fuels, has built a manufacturing and transportation infrastructure, and is by far the highest volume biofuel produced in the United States, producing nearly 16 billion gallons per years.” he said.

The government aims to expand domestic production of sustainable jet fuel to 3 billion gallons by 2030 and 35 billion gallons by 2050. Producers must reduce emissions by 50% or more compared to petroleum jet fuel to qualify for tax credits. Producers can receive a tax credit of $1.25 to $1.75 per gallon.

Shaw said it is unclear how much money would flow to farmers.

“Fuel manufacturers are going to look at all kinds of different ways to lower and continue to lower their carbon scores,” he said. “If farmers get credit for their carbon score, there is an economic incentive to buy their corn and give them a premium.”

The model also includes the controversial use of carbon capture and storage. Summit Carbon Solutions and Wolf Carbon Solutions propose building pipelines through Iowa and other Midwestern states that could be used to capture carbon at ethanol production facilities, liquefy it under pressure and route it to North Dakota or Illinois to be stored deep underground.

Carbon capture advocates say the pipelines are needed to reduce ethanol’s carbon emissions so the renewable fuel can remain viable under climate change goals. But critics oppose the Ames-based Summit’s request to use eminent domain to force unwilling landowners to sell access to pipelines. They are also concerned about safety and the risk of damage during the construction of agricultural land and underground drainage tiles.

Wolf did not request eminent domain powers.

Donnelle Eller covers agriculture, environment and energy for the Register. Reach her at [email protected] or 515-284-8457.

Related Posts