Minnesota ag official urges adoption of GREET for SAF tax credit

By Erin Voegele | August 28, 2023

Minnesota Department of Agriculture Commissioner Thom Petersen is encouraging the federal government to allow the U.S. Department of Energy’s GREET model to be used to calculate greenhouse gas (GHG) reductions for the purposes of the sustainable aviation fuel (SAF) tax credit.

The SAF tax credit, created by the Inflation Reduction Act, includes language specifying that the GHG reduction of the fuel is to be calculated with “the most recent Carbon Offsetting and Reduction Scheme for International Aviation which has been adopted by the International Civil Aviation Organization” or a similar methodology. Petersen has joined numerous supporters of the U.S. biofuel industry in calling for the U.S. Department of Treasury to allow the GREET model to serve as an alternative model to CORSIA.

Petersen on July 24 sent a letter to U.S. Agriculture Secretary Tom Vilsack addressing the issue, stressing that the GREET model more accurately accounts for U.S. agricultural practices.

“The Biden Administration is expected to finalize guidance on which method and accompanying model will be used to measure the carbon intensity of a sustainable aviation fuel (SAF) made from biomass – and whether a given fuel qualifies for the tax credit authorized in the Inflation Reduction Act,” Petersen wrote. “This decision regarding the carbon intensity method and model selected for eligibility will determine whether our farmers will be able to sell their products into the sustainable aviation market.

“The key question remains whether U.S. sustainable aviation fuel producers will be allowed to use a lifecycle greenhouse gas (GHG) emissions accounting methodology based on the well-established Argonne GREET model developed by the U.S. Department of Energy (DOE), which is used with standards for other biofuels, or whether producers can only use a policy framework approved by an international body (ICAO) under the CORSIA program,” he continued. “The GREET methodology is tailored to U.S. circumstances and would permit some row crops to be utilized for SAF under both the 40B and 45Z tax credits, whereas the CORSIA methodology would deter their use.

“Reliance on the international CORSIA method will make it extremely difficult for feedstock from U.S. row crops to qualify for either tax credit, largely because the CORSIA method does not properly credit the GHG emissions savings attributable to the use of such crops nor the regenerative practices as feedstock for SAF,” Petersen added. “Upcoming guidance from the Administration should adopt the GREET method, with input from U.S. Department of Agriculture models properly incorporating U.S. agricultural crops, as the alternative to the CORSIA framework.”

In the letter, Petersen specifically criticizes the CORSIA model for failing to credit climate-smart agricultural practices, carbon capture and sequestration (CCS), and the use of low-carbon intensity electricity and hydrogen. “We should reward farmers who adopt increasingly lower-carbon operations and practices onsite and prevent misaligned incentives that fail to recognize and encourage cleaner processes and products,” he wrote.

The Minnesota Bio-Fuels Association (MN Bio-Fuels) issued a statement Aug. 25 applauding Petersen’s letter. “Minnesota Bio-Fuels Association is grateful for Commissioner Petersen and Secretary Vilsack’s efforts to ensure Minnesota farmers and ethanol producers can continue contributing towards the decarbonization of our transportation sector,” said Brian Werner, executive director of MN Bio-Fuels. “We urge regulators in Washington to adopt SAF tax credit guidance that supports Minnesotan farmers and biofuels."

A full copy of the letter is available on the MN Bio-Fuels website