Green path forward - treasury endorses biofuels with SAF incentives

Dec 19, 2023

In an exciting development for the biofuel industry, the U.S. Department of Treasury has chosen the GREET (Greenhouse Gases, Regulated Emissions, and Energy Use in Technologies) model to determine tax credits for sustainable aviation fuel (SAF). This decision is a boon for U.S. farmers and ethanol producers, positioning them at the forefront of SAF development.

The adoption of the GREET model, a respected tool created by the U.S. Department of Energy, allows for accurate measurement of ethanol’s carbon footprint. This ensures that SAF derived from corn ethanol qualifies for significant tax incentives, a critical factor for the industry’s growth. These incentives range from $1.25 to $1.75 per gallon, based on the degree of greenhouse gas emission reduction achieved.

Industry leaders, including Harold Wolle of the National Corn Growers Association and Brian Jennings of the American Coalition for Ethanol, have expressed their support for this milestone. They acknowledge its potential to lower the aviation sector's carbon footprint and drive innovation in biofuel technology.

Moreover, the Treasury Department plans to update the GREET model by March 2024, incorporating the latest data and scientific advancements. This update will include new modeling for indirect emissions such as crop production and livestock activities, aligning with the most current environmental strategies.

The Treasury's decision reflects the administration's commitment to environmental sustainability and recognizes the biofuel industry's integral role in the nation's journey towards net-zero emissions. It also indicates an adaptable, science-based approach to environmental policy, essential in the global fight against climate change.