Aviation Fuel Subsidy Sparks Lobbying War Over Ethanol

The administration's climate law has triggered a lobbying war over whether to simplify the process for sustainable aviation fuel (SAF) made from corn ethanol to get subsidies.  

Biofuel industry stakeholders see SAF as a vital growth catalyst for ethanol. Simultaneously, Environmentalists say that using land for fuel crops makes global warming worse. 

The Inflation Reduction Act's mandate, which requires SAF producers to demonstrate scientifically that their fuel generates 50% less greenhouse gas than petroleum fuel, is a point of contention.  

Midwest ethanol manufacturers push for a model that supports ethanol-based SAF, while environmentalists advocate for a model that favors inputs like used cooking oil and animal fat. 

The final decision will determine who benefits from billions in expected subsidies. The administration aims to supply 3 billion gallons of SAF annually by 2030, striving to decarbonize the transport sector.  

By 2050, the administration envisions the SAF industry satisfying 100% of aviation fuel demand, approximately 35 billion gallons per year. 

Farm state lawmakers and biofuels advocates argue that these targets are unrealistic without ethanol. Environmental groups, however, claim ethanol's inclusion would derail the administration's climate goals. The resolution is expected by September.