September 21, 2023

Tie U.S. aviation biofuels tax decisions to government’s model: Corn leaders

Janet Yellen

CHESTERFIELD, Mo. — Sixteen of the nation’s top corn grower leaders sent a letter to U.S. Treasury Secretary Janet Yellen on Sept. 8 encouraging her to adopt an emissions model developed by the Department of Energy as her agency works with the Internal Revenue Service to determine which lower greenhouse gas emissions enough to qualify for sustainable aviation fuel tax credits under the Inflation Reduction Act.

Corn growers are calling on Treasury to use an emissions standard referred to as the GREET model, which was developed by DOE, while some groups want the government to turn to a less comprehensive international standard.

“GREET is the federal government’s most robust and updated model or methodology for transportation lifecycle assessment,” the letter stated.

“It is used globally to measure life-cycle greenhouse gas emissions from transportation, and the Department of Energy has the best resources, expertise and current ability within federal government agencies to assess lifecycle emissions accurately and scientifically.”

Unlike other models, Greenhouse Gases, Regulated Emissions and Energy Use considers the full environmental picture, the corn growers noted.

“The GREET model accurately accounts for on-farm carbon reduction activities and feedstock yield increases and the improved agriculture production practices that farmers have adopted over the last 20 years,” the letter continued.

“This further solidifies GREET as the methodology Treasury and the IRS should use to determine tax credits for SAF under the IRA.”

The letter comes as corn ethanol, which has been used for years to lower greenhouse gas emissions from cars and trucks while saving consumers money at the pump, is being considered for use in the aviation arena where experts say the biofuel would do for airplanes what it has done for autos.

But as corn grower leaders point out, the tax credit from the Inflation Reduction Act will be crucial to ensuring ethanol is quickly made available in the aviation sector.

A decision on that tax credit could come down to which emissions model is used to determine greenhouse gas emission reductions.

Citing a recent speech in which President Joe Biden said farmers will lead the way on aviation biofuels, the letter noted, “If we are going to make the president’s promise a reality, we are going to have to have a reliable model in place and one that bases U.S. tax policy on the best information and instruments the U.S. government has to offer.”

Yellen is expected to make a final announcement on the tax credits this month.