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Biden administration delays Greet.. better not incentivize foreign sources for SAF.
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Posted 3/2/2024 05:35 (#10647655)
Subject: Biden administration delays Greet.. better not incentivize foreign sources for SAF.

The long awaited GREET update for an Inflation reduction tax credit was delayed instead of rolled out at the Commodity Classic.  

Evidently, this version wasn’t politically acceptable.  If the Biden administration somehow promoted foreign sugar cane ethanol production from Brazil.. which is raised on converted lands, burned, trucked a couple thousand miles..shipped up through the Panama Canal.. but somehow favored over US Corn based ethanol?!?

That would have been a disaster!!!

so if we’re going to consider this.. at all.. it better make sense.

The IRA signed by President Joe Biden in August 2022, created a variety of clean energy tax credits, including the 40B tax credit for SAF. The SAF tax credit incentivizes the production of SAF that achieves a lifecycle greenhouse gas (GHG) reduction of at least 50% when compared to petroleum-based jet fuel.  The SAF tax credit starts at $1.25 per gallon for SAF that achieves a 50% GHG reduction. An additional 1 cent per gallon is available for each percentage point by which the lifecycle GHG emission reduction of the fuel exceeds 50%, with the credit capped at $1.75 per gallon. 

Language included in the IRA specifies that the GHG reduction threshold can be calculated using the most recent Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) model that has been adopted by the International Civic Aviation Organization, or by a “similar methodology” to the most recent CORSIA model. The use of the European-based CORSIA model has been criticized by the U.S. agriculture and biofuel industries for failing to accurately account for U.S. agricultural practices and preventing crop-based fuels from participating in the SAF market. 

Following months of advocacy from U.S. agriculture and biofuels groups, the U.S. Department of Treasury and Internal Revenue Service in December 2023 announced taxpayers would be able to use and updated version of the U.S. Department of Energy’s Greenhouse Gases, Regulated Emissions and Energy Use in Transportation (GREET) model to calculate lifecycle GHG reductions for the purposes of the SAF tax credit. The adoption of GREET ensures crop-based SAF will be eligible to claim the tax credit. 

The December 2023 guidance released by Treasury and IRS formally adopts an updated version of the DOE’s GREET model as a “similar methodology” to CORSIA for the purposes of the SAF tax credit, ensuring that SAF made from crop-based feedstocks, including ethanol, can qualify for the credit. The guidance also specifically indicates that numerous fuels will qualify for the tax credit, including valid biomass-based diesel, advanced biofuels, cellulosic biofuel, or cellulosic diesel that have been approved by the EPA under the Renewable Fuel Standard. 

The USDA, DOE, EPA and DOT’s Federal Aviation Administration formed the Sustainable Aviation Fuels Lifecycle Analysis Working Group to create the updated GREET model, referred to as 40BSAF-GREET. The updated GREET model is expected to 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 GHG emission reduction strategies, such as carbon capture and storage (CCS), renewable natural gas (RNG), renewable electricity, and climate-smart agriculture practices. 

The four federal agencies participating in the working group in December 2023 set a March 1 deadline for release of 40BSAF-GREET. They have, however, missed that self-imposed deadline. 

The Renewable Fuels Association expressed disappointment in the delayed release of 40BSAF-GREET, but noted that it’s important that the working group get the science right. “While we are pleased to hear progress is being made on the modified GREET model, we are disappointed by this additional delay,” said Geoff Cooper, president and CEO of the RFA. “RFA is calling on the Interagency Working Group to complete this process as expeditiously as possible, while maintaining scientific integrity and honoring the commitment to incorporate a broad range of carbon reduction strategies. To meet the Biden administration’s SAF goals, the marketplace needs certainty and clarity. Investment and innovation in SAF technologies will remain frozen until the model is finalized and additional guidance is issued.”

Cooper added, “Getting the modeling right could open the door for America’s farmers and ethanol producers to participate in an enormous decarbonization opportunity. But getting it wrong will strand investments and assure the failure of the Biden administration’s climate objectives.”

Growth Energy called the delay frustrating, but expressed optimism that the working group will get it right. “The administration made a clear commitment to finalize this guidance no later than March 1,” said Emily Skor, CEO of Growth Energy. “This delay is frustrating, but we’re optimistic that it’s happening for a productive reason. Ultimately, what’s most important is getting it right, and making sure that the resulting updates provide real opportunities for American farmers to contribute to the SAF market. Officials should follow the science behind Argonne-GREET, the most accurate model and the only one that accounts for all of the climate-smart innovations happening on farms across America’s heartland. American bioethanol producers must be allowed to compete in the SAF marketplace. The alternative is making SAF from Brazilian sugar cane, or used cooking oil imported from China, instead of renewable crop-based feedstocks grown on American farms.”   

I personally Can NOT understand ANY VALID reason.. that the US should subsidize the use of Brazilian sugar cane production in ANY WAY.. SHAPE.. OR FORM.


Edited by JonSCKs 3/2/2024 05:51
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