OP-ED: Sound Policymaking Needed to Fully Scale Sustainable Aviation Fuel

By BRIAN DUNCAN
Illinois Farm Bureau President

Ethanol represents a significant market for my Ogle County family farm. We can deliver corn to seven ethanol plants within a 70-mile radius, and distillers’ grains are a valuable input for our livestock enterprises.

Biofuels like ethanol can benefit both the economy and the environment. Illinois, which ranks third in the nation for ethanol production, is meeting the demand of consumers and industries for cleaner, domestic energy sources.

But this demand did not build itself. Decades of sound policymaking created channels and incentives for the agriculture and biofuels industries to supply a growing market.

The expanded Renewable Fuel Standard mandating the use of renewable fuels in transportation, and year-round use of higher blends of homegrown biofuels, such as E15 and E85, have bolstered the ethanol market. State and federal tax credits tied to biofuels have been economic game changers for our state.

Sustainable aviation fuel (SAF), a bio-based jet fuel made from corn ethanol or soybean oil, holds similar economic and environmental opportunities as a path to decarbonize the aviation industry with homegrown biofuels.

While farmers, airlines, and the ethanol industry are eager to embrace SAF, challenges persist in scaling up SAF production. Sound, reasonable policies are needed to ensure significant changes and cost investments are worthwhile.

A first step came with recently released guidance from the U.S. Treasury Department acknowledging feedstocks grown utilizing conservation practices can reduce overall SAF greenhouse gas emissions. This will play a role in the federal SAF production tax credits authorized under the Inflation Reduction Act.

Known as 40B, a $1.25-per-gallon tax credit will be awarded to SAF products with greenhouse gas emissions scores 50 percent lower than petroleum-based jet fuels, along with additional incentives. This credit is retroactive to 2023 and extends through 2024.

The Greenhouse Gases, Regulated Emissions, and Energy Use in Technologies (GREET) model will be used to assess the 50 percent emission reduction.

Illinois Farm Bureau policy supports use of the GREET model in scoring the carbon intensity of agricultural feedstocks for SAF and other biofuels. We have advocated with federal officials to select GREET, because it incorporates accurate, updated data around emissions and land-use changes, and recognizes on-farm practices to lower the carbon intensity of SAF and biofuel feedstocks.

The Treasury’s guidance for ethanol and biodiesel facilities will require farmers to demonstrate multiple sustainable practices, including no-till farming, cover crops, and energy-efficient fertilizer use. The bundled requirements are restrictive and lack the flexibility farmers need to use carbon-reducing practices that work for their farm.

Development of 45Z SAF tax credit guidance for 2025 through 2027 should include more options and flexibility in farming methods that qualify and allow farmers to adjust their methods from year-to-year.

It should also utilize the existing feedstock calculator available for use with GREET to determine on-farm carbon intensity of practices implemented by farmers to grow grain for SAF.

Federal and state-level incentives, such as Illinois’ $1.50-per-gallon SAF purchaser and user tax credit, are crucial for stimulating the SAF market. About 25 million gallons of SAF were produced in 2023, far below the current administration’s SAF goal of three billion gallons by 2030 and 35 billion gallons by 2050.

Modeling from Iowa-based Decision Innovation Solutions suggests U.S. agriculture has the production capacity of meeting about half of future SAF grain demand. SAF produced from soybean oil would account for four billion gallons, while SAF made from corn ethanol would make up another six-to-11 billion gallons.

To contribute to those production levels, Illinois would need to establish 14 more 200-million-gallon ethanol plants and invest in other SAF infrastructure. Such expansion could lead to an extra $13 billion in economic activity per year, DIS models show.

Without a viable SAF market, corn farmers risk losing out on $2 billion per year through 2050. These are real, tangible dollars farm families can use to sustain their operations and pass on to the next generation.

To fully scale SAF technology and realize its market potential, today’s policy decisions around SAF must provide the certainty and flexibility farmers need to meet demand.

Airlines and biofuel producers require a solid backstop to their major investments into SAF technology, just as much as farmers deserve credit for adopting and implementing sustainable farm practices used to produce SAF feedstocks.

This economic opportunity is too valuable to get wrong.

 This story was distributed through a cooperative project between Illinois Farm Bureau and the Illinois Press Association. For more food and farming news, visit FarmWeekNow.com.