The U.S. ethanol industry is lobbying the Biden administration to ensure lower-carbon aviation fuel made from ethanol will qualify for subsidies under the U.S.’s Inflation Reduction Act.
The ethanol industry is arguing such provisions are crucial to meeting U.S. climate goals.
Why it matters: The biofuel market in the U.S. is looking for new footholds.
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The campaign reflects the ethanol industry’s desire to expand into aviation following years of stagnant demand for the corn-based fuel as an ingredient in gasoline. Projections also forecast that motor fuel demand will fall in the future due to better efficiency and the ascent of electric cars.
“Over the last 18 months, there’s been a growing recognition in our industry that, long-term, you’ve got to be looking at new uses and new markets and non-traditional applications for ethanol if we’re going to continue to grow our industry and its value,” said Geoff Cooper, president of the Renewable Fuels Association, one of the organizations involved in the push.
Sustainable aviation fuel (SAF) is considered vital to decarbonizing the hard-to-electrify airplane industry. The Biden administration is targeting at least 11.4 billion litres of SAF production per year in the United States by 2030 as part of its broader push to fight climate change.
At issue is a requirement in the administration’s Inflation Reductions Act package, signed into law last year. It necessitates that SAF yield a 50 per cent reduction in lifecycle emissions compared with petroleum-based jet fuel before it can qualify for tax credits.
The lifecycle emissions impact of SAF can vary widely depending on the feedstock that producers use to make it, which can include a variety of substances ranging from soybean oil to used cooking oil and animal fat.
Different methodologies to calculate the emissions of SAF can also yield different results.
The ethanol industry is asking the administration to use a methodology developed by the U.S. Department of Energy, called GREET, which shows ethanol to have a lighter carbon footprint than that prescribed by the reductions act, which was developed by the International Civil Aviation Organization.
A coalition of ethanol industry representatives and allies in the airlines industry, known as the SAF BTC Coalition, wrote to the U.S. Treasury Department in February, asking that the administration use the energy department methodology.
The coalition includes the Renewable Fuels Association, Growth Energy, United Airlines Holdings Inc., Delta Air Lines Inc., and SAF producers LanzaJet Inc. and Gevo Inc.
Cooper said his association also had numerous conversations across the Biden administration—including with the U.S. Department of Agriculture, treasury department and with the Federal Aviation Administration—about ethanol as a feedstock for SAF, and specifically around ethanol’s carbon intensity.
Handful of projects
Ethanol groups say their supply chain, which already produces and transports huge volumes per year, would be readily available to help boost production of SAF. But so far, only a handful of ethanol-to-SAF projects have been proposed.
LanzaJet, for example, is building an alcohol-to-jet production facility in Georgia using ethanol as a feedstock, due for completion this year. The company says it would be the first facility of its kind globally.
The project would produce 10 million U.S. gallons of SAF and renewable diesel per year, a fraction of the roughly 24.7 billion gallons of petroleum-based jet fuel now produced in the U.S. annually.
Gevo has said it expects to develop, own and operate ethanol-to-jet plants to produce SAF. The company has agreements with Delta Air Lines and American Airlines Group Inc. to supply each with tens of millions of gallons of SAF per year for several years starting in 2026.
Engineering and aerospace giant Honeywell International Inc. has also announced a new ethanol-to-jet fuel processing technology.
