The Biden administration Tuesday sought to spur the growth of sustainable jet fuel, seen as crucial to reducing greenhouse gas emissions, with a system of tax credits for producers.
Aviation fuels made out of crops will help “decarbonize” the commercial airline industry, administration officials said as it unveiled the incentives, which were authorized in the Inflation Reduction Act.
“Today’s announcement is an important steppingstone as it acknowledges the important role farmers can play in lowering greenhouse gas emissions and begins to reward them through that contribution in the production of new fuels,” Agriculture Secretary Tom Vilsack said in a statement. “This is a great beginning as we develop new markets for sustainable aviation fuel that use home grown agricultural crops produced using climate smart agricultural practices.”
Under the program, producers will be eligible for a tax credits for sustainable aviation fuel (SAF) that achieves at least a 50 percent reduction of greenhouse gas emissions when compared with petroleum-based jet fuel. SAF that achieves a greenhouse gas emissions reduction of 50 percent is eligible for a $1.25 credit per gallon amount, and SAF that achieves an emission reduction of more than 50 percent is eligible for an additional 1 cent per gallon for each percentage point the reduction exceeds 50 percent — for a maximum per gallon credit of $1.75.
In a briefing with reporters, John Podesta, senior adviser to the president for international climate policy, said the U.S. commercial airline industry consumes about 10 percent of all transportation energy and produces about 2 percent of American’s carbon pollution. While seen as “hard to decarbonize,” Podesta said the administration views it as a “must decarbonize sector.”
“SAF is a key to achieving net zero aviation,” Podesta said.
As part of the updated guidance, the SAF Interagency Working Group also announced an update to a model that provides additional methodology for SAF producers to determine the life cycle greenhouse gas emissions rate of the production of jet-fuel crops.
Some environmental groups and scientists have raised concerns about the administration’s plan because farmland being used to grow food could be displaced by crops used for jet-fuel production. That could lead to deforestation around the world as land is cleared for food production to backfill for what is displaced in the United States.
Dan Lashof, director of the World Resources Institute in the United States, said the administration made some improvements to the rules but that they still don’t fully account for the loss of cropland.
“The fundamental issue for us is that we don’t think it makes sense to turn food into jet fuel and we’re not happy about creating a pathway to make it possible,” Lashof said. “This is really about how we should be using the limited amount of prime agricultural land in a world where we need to feed a population approaching 10 billion people.”
The guidance incorporates an Agriculture Department pilot program to encourage the use of climate-smart agriculture practices. Those who use a “bundle” of certain practices, including cover crops and enhanced efficiency fertilizer, would be eligible for a greenhouse gas reduction credit.
Soybeans and vegetable oil are examples of materials used to create the jet fuels that would produce no more than half the emissions of the petroleum-based product.