USDA Announces GHG Model to Aid Ethanol in Accessing Aviation Fuel Subsidy

The U.S. Department of Agriculture has announced its intention to allocate up to $400,000 towards the adaptation of a federal greenhouse gas emissions model. This adjustment aims to ensure that aviation fuel produced from corn-based ethanol qualifies for substantial subsidies. Tom Vilsack, agriculture Secretary, made this announcement during a conference, emphasizing the commitment to facilitate the inclusion of various feedstocks, including ethanol, in the eligibility criteria.

Speaking at the conference hosted by the biofuels advocacy organization Growth Energy, Secretary Vilsack outlined the USDA's ongoing efforts to address concerns within the biofuel industry. This industry is apprehensive about potential exclusion from the multibillion-dollar market for sustainable aviation fuel (SAF), a market that both airlines and President Joe Biden's administration view as crucial for reducing emissions in the transportation sector.

The Inflation Reduction Act enacted last year introduced attractive tax credits for SAF producers. These credits are granted to producers who can demonstrate, using an approved scientific model, that their aviation fuel emits 50% fewer greenhouse gases than conventional gasoline.

However, there is a debate within the Biden administration regarding whether to permit the use of the U.S. Department of Energy's Greenhouse Gases, Regulated Emissions, and Energy Use in Technologies (GREET) model, as requested by the biofuels industry. Critics argue that this model underestimates emissions resulting from the conversion of farmland or vegetation into biofuel crop cultivation.

Secretary Vilsack, an advocate of the GREET model, revealed that the USDA is actively making modifications to it. He stated, "We're investing our own resources at USDA to ensure that the GREET model aligns with our goals." The agency has earmarked funding ranging from $300,000 to $400,000 for this initiative, which is expected to be completed by the end of the year.

Despite this announcement, the USDA has not provided details regarding the specific adjustments being made to the GREET model.

Secretary Vilsack also underscored his commitment to garnering support for the GREET model. He mentioned that he has engaged in discussions with the secretaries of transportation, environment, and treasury to build consensus and alignment around the model's use.

In summary, the USDA's decision to allocate funds for the adjustment of the GHG emissions model demonstrates the agency's dedication to expanding the eligibility criteria for aviation fuel subsidies, particularly for fuels derived from corn-based ethanol. Secretary Vilsack's efforts to ensure the GREET model's compatibility with the USDA's objectives and his outreach to key stakeholders reflect the agency's commitment to support the biofuel industry's inclusion in the growing SAF market. This initiative represents a pivotal step in addressing concerns within the industry and advancing the broader goal of reducing emissions in the transportation sector.