Biden Admin Unveils Green Jet Fuel Subsidy Rules In Win For Big Corn

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Nick Pope Contributor
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The Biden administration unveiled eligibility guidelines Friday for “sustainable aviation fuel” (SAF) subsidies, which stand as a victory for the powerful corn lobby.

The Treasury Department released the guidelines, which would allow biofuels that reduce greenhouse gas emissions by at least 50% as determined by the federal “GREET” model to qualify for Inflation Reduction Act (IRA) tax credits. The ethanol and corn lobbies pushed hard for the guidelines to accept “GREET” as a model for determining eligibility, as it makes it easier for corn-based ethanol to be considered sufficiently “eco-friendly” as opposed to other frameworks, according to The Hill.

Notably, the federal government is planning to update the “GREET” model sometime by March 2024, according to the Treasury Department.

The Biden administration is aiming for SAFs to meet 100% of the country’s annual aviation fuel demand — a projected 35 billion gallons — by 2050, an effort intended to protect the environment and counter climate change. Corn-based ethanol SAF is primed to play a major role in meeting that target, but its status as a surefire way to help the environment is more complicated than the administration and other SAF proponents may suggest. (RELATED: EPA Released A Long-Delayed Report Showing Ethanol Hurts The Environment)

With corn-based ethanol more likely to qualify for subsidies, American farmers are likely to significantly increase the amount of corn they grow to meet the higher demand for SAFs, experts previously told the Daily Caller News Foundation. That dynamic could have several impacts, including adding strain on groundwater aquifers in the heartland and increasing food costs for American consumers, according to Farm Aid.

Increased reliance on corn-based ethanol aviation fuel “is not going to do much for global warming, but it will do quite a lot to benefit the renewable fuel industry and it will also indirectly benefit corn prices,” Prof. C. Ford Runge, Distinguished McKnight University Professor of Applied Economics and Law at the University of Minnesota, previously told the DCNF.

The costs of corn-based ethanol aviation fuel will be “borne by consumers, taxpayers and the environment,” and “there’s no clear evidence that biofuels, especially corn ethanol, have an edge in reducing emissions,” Runge told the DCNF.

The Treasury Department worked on the guidance alongside other agencies, including the Department of Transportation (DOT), the Department of Agriculture (USDA) and the Department of Energy (DOE).

“Sustainable aviation fuel is a critical tool for tackling the climate crisis,” Senior Adviser to the President for Clean Energy Innovation and Implementation John Podesta said of the guidelines. “Today’s guidance from Treasury provides certainty that multiple pathways are available to producers as they compete to decarbonize the aviation sector.”

The White House, the Treasury Department, the DOT and the DOE did not respond immediately to requests for comment.

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