Ethanol groups urge Treasury to adopt GREET for SAF tax credit

The Renewable Fuels Association, Growth Energy and the U.S. Grains Council on Sept. 14 sent a letter to U.S. Treasury Secretary Janet Yellen advocating for the adoption of GREET to measure greenhouse gas (GHG) reductions for the purposes of sustainable aviation fuel (SAF) tax credit created by the Inflation Reduction Act. 

The law creating the SAF tax credit 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. Representatives of the U.S. biofuel and agricultural industries have been urging Treasury to adopt GREET as a methodology to calculate GHG emissions reductions for the purposes of the SAF tax credit, noting it most accurately reflects current U.S. agricultural practices.

In their letter, the RFA, Growth Energy and USGC explain the global SAF industry is at a critical juncture, stressing that “the pending decisions on carbon intensity estimation methods will ultimately determine the success or failure of SAF commercialization and trade efforts.”

The letter criticizes the ICAO’s CORSIA methodology for including outdated information and obsolete data on the carbon intensity of SAF made from corn ethanol. “To ensure U.S. farmers, ethanol producers and SAF developers have a fair opportunity to participate in the global market, we firmly believe that timely and needed updates to the ICAO CORSIA model are required for export opportunities, and that recognition of the Department of Energy's (DOE) GREET methodology must be used for the purposes of estimating the carbon intensity of SAF domestically,” the groups wrote.

“While U.S. domestic initiatives are essential in encouraging SAF production and utilization, we must not disregard the global market's influence on curating SAF supply and demand and the U.S. bioethanol industry's competitiveness on the international stage,” they continued. “Under the current ICAO CORSIA methodology, U.S. corn ethanol SAF appears uncompetitive on the world market compared to SAF produced from alternative sources in other regions, due to ICAO’s use of outdated data from over a decade ago such as their excessive indirect land use change (iLUC) penalties.”

The RFA, Growth Energy and USGC strongly support the adoption of GREET by the U.S. Treasury as the standard for carbon intensity scoring of conventional aviation fuel and SAF. “The latest DOE GREET model relies on the most current information and highest-resolution data regarding the energy use, carbon emissions and potential land use impacts associated with the corn ethanol-based SAF process,” the groups wrote. “By incorporating the DOE GREET model into its evaluation framework, the Treasury can unlock the full potential of agriculture to meet the growing demands of the global aviation industry while simultaneously reducing its carbon footprint.” 

The letter also encourages the U.S. Treasury and interagency officials to collaborate with the ICAO to rectify the discrepancies in its CORSIA model, undertake necessary adjustments to its methodology, and ensure timely scientific updates. “These efforts are essential to create a level playing field for U.S. SAF producers, allowing them to effectively compete in supplying the rapidly expanding global SAF market,” the groups wrote. 

A full copy of the letter is available on the Growth Energy website.