STATEMENT: U.S. Treasury Department Guidance for Aviation Fuels Tax Credits Could Increase Reliance on Counterproductive Crop-Based Biofuels
WASHINGTON (December 15, 2023) – Today the U.S. Treasury Department released new guidance for so-called “sustainable aviation fuel” (SAF) tax credits that could allow jet fuel made from corn ethanol or vegetable oils to qualify for generous subsidies.
The Inflation Reduction Act (IRA) created a tax credit for sustainable aviation fuels (SAF) that reduce emissions by at least 50%. This tax credit is intended to help the aviation industry meet its decarbonization goals.
Estimating the emissions reductions from a given alternative aviation fuel depends, however, on what model is used and what assumptions are being used in a given model. The original IRA language for the tax credit refers to the CORSIA model, under which neither corn ethanol nor biofuels from vegetable oil would meet the 50% emissions reduction requirement. Allowance of the GREET model, however, could favor use of corn ethanol for SAF because some applications of the model use optimistic assumptions about soil carbon and land use impacts associated with biofuel production.
Following is a statement from Dan Lashof, Director, United States, World Resources Institute:
“Reducing aviation emissions is challenging but incentivizing the use of crop-based jet fuel is certainly not going to help the sector become sustainable.
“The new guidance from the Treasury Department could have huge land use ramifications that could worsen climate change and hunger. Research shows that if the sustainable aviation biofuels target of 35 billion gallons were all made from corn using the ethanol-to-jet pathway, it would require 114 million acres of prime farmland—20% more than all the land currently dedicated to growing corn in the United States. This would be devastating for food security and could increase carbon dioxide emissions by more than 340 million metric tons.
“The global implications are even worse. Making just 25% of future aviation fuels from vegetable oil would require doubling global vegetable oil production, most of which comes from oil palm and soybean expansion into tropical forests and other habitats.
“The Inflation Reduction Act’s eligibility requirement for sustainable aviation fuel tax credits is intended to make sure we don’t jump from the frying pan into the fire. The federal government should adhere to the best available science, which shows that crop-based fuels do not meet the law’s requirement and are not the answer to cut aviation emissions.”