Biden administration details how producers of sustainable aviation fuel will get tax credits
The Biden administration is out with new guidelines for tax credits for producers of sustainable aviation fuel
The Biden administration spelled out guidelines Tuesday for tax breaks designed to boost production of sustainable aviation fuel and help curb fast-growing emissions from commercial airplanes.
The Treasury Department actions would clear the way for tax credits for corn-based ethanol if producers follow “climate-smart agriculture practices,” including using certain fertilizers and farming methods.
The announcement was praised by the ethanol industry but got a much cooler reaction from environmentalists.
To qualify, sustainable aviation fuel, or SAF, must cut greenhouse-gas emissions by at least half compared with conventional jet fuel made from oil. Congress approved the credits — from $1.25 to $1.75 per gallon — as part of Biden's huge 2022 climate and health care bill.
Administration officials said commercial aviation — that is mostly passenger and cargo airlines — accounts for 10% of all fuel consumed by transportation and 2% of U.S. carbon emissions.
The Renewable Fuels Association, a trade group for the ethanol industry, said the Treasury guidelines “begin to unlock the door for U.S. ethanol producers and farmers to participate in the emerging market for sustainable aviation fuels.”
The trade group, however, was disappointed that producers will have to follow certain agricultural practices to claim the tax credit.
Skeptics worry that a large share of the tax credits will go to ethanol and other biofuels instead of emerging cleaner fuels.
“The science matters and we are concerned this decision may have missed the mark, but we are carefully reviewing the details before reaching any final conclusions,” said
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