(Des Moines) Iowa Ag Secretary Mike Naig released the following statement following yesterday’s guidance by the U.S. Department of Treasury and Internal Revenue Service on the 40B Sustainable Aviation Fuel (SAF) Credit.
“As the top producing state of lower cost and cleaner burning biofuels, sustainable aviation fuel is an emerging market with huge potential for Iowa agriculture,” said Naig. “Unfortunately, the Biden administration tells Iowa farmers that Washington D.C. knows best.
“The administration’s proposal mandates rigid requirements that ignore the innovation of agriculture and fails to recognize farmers’ ability to incorporate the best practices for their operations,” states Naig. This administration has continually pursued a one-size-fits-all approach that puts domestic energy production, like homegrown ethanol, at a disadvantage to international competitors. Yesterday’s guidance is more of the same.
“While including the GREET model is a welcome step, the details need to be right, and the administration has more work to do,” Naig said. I know Iowa’s Congressional delegation will work to ensure that Iowa’s farmers and biofuel producers will be able to realize the full potential that SAF offers.”
On Tuesday, the U.S. Department of Treasury and Internal Revenue Service released information on the 40B Sustainable Aviation Fuel (SAF) Credit, which incorporates an updated version of the GREET (Greenhouse gases, Regulated Emissions, Energy use in Technologies) model to measure the lifecycle emissions from SAF.
The Treasury Department’s guidance provides important clarity around eligibility for the SAF Credit. The credit incentivizes the production of SAF, which achieves a lifecycle reduction of at least 50% in greenhouse gas emissions compared to petroleum-based jet fuel. Producers of SAF are eligible for a tax credit of $1.25 to $1.75 per gallon. SAF that decreases GHG emissions by 50% is eligible for the $1.25 credit per gallon amount, and SAF that reduces GHG emissions by more than 50% is eligible for an additional $0.01 per gallon for each percentage point the reduction exceeds 50%, up to $0.50 per gallon.
Under the guidance, numerous fuels will qualify for the credit, including valid biomass-based diesel, advanced biofuels, cellulosic biofuel, or cellulosic diesel approved by EPA under the Renewable Fuel Standard (RFS).