SAF subsidies for corn-based ethanol producers could be delayed
US President Joe Biden’s administration looks likely to delay a decision on whether to make it easier for sustainable aviation fuel (SAF) made from corn-based ethanol to qualify for subsidies under the White House’s signature climate law until December.
The administration has been divided over the issue, which has prompted a fierce lobbying push from US Farm Belt stakeholders that see SAF as crucial for the ethanol market’s growth, Reuters reported.
However, environmental groups have argued that clearing land to grow crops for fuel is counterproductive to curbing global warming.
John Podesta, a senior White House adviser on clean energy, has been tasked with resolving the issue.
At issue is a requirement in last year’s Inflation Reduction Act (IRA) that SAF producers seeking tax credits must demonstrate with an approved scientific model that their fuel generates 50% less greenhouse gas emissions over its lifecycle than petroleum fuel.
Midwest ethanol producers have asked the administration to adopt a model that would enable ethanol-based SAF to qualify while environmentalists want standards that would favour inputs like used cooking oil and animal fat.
The administration’s decision will determine who benefits from billions of dollars in subsidies expected under the program. It was expected to announce a decision by September.
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