Treasury Expected To Provide Guidance On Corn-Based SAF This Week

Reuters has reported that the U.S. Treasury will release guidance by the end of this week on the issue of subsidies for using corn-based ethanol for sustainable aviation fuel (SAF). Producers of corn-based ethanol fuel see aviation applications as one of the few pathways for growing their industry with the expanding of electric vehicles stemming demand for automotive fuel. Conversely, opponents of the subsidies see devoting more land to crops for producing transportation-based fuel as exacerbating global warming. Those opponents would prefer that animal fat and used cooking oil take precedence in generating SAF.

The Biden Administration faces pressure from lobbyists from farm regions, a critical electorate in the upcoming presidential election. Originally, guidance from the U.S. Treasury was expected in September, then delayed twice. Late last month, U.S. Agriculture Secretary Tom Vilsack told Reuters he was confident ethanol would be a staple for SAF. He said, "They [U.S. Treasury] will provide some direction and guidance,” but added that specific rules might take “a little bit longer."

Under President Biden’s climate law, SAF producers vying for the billions of dollars in tax-credit subsidies via 2022’s Inflation Reduction Act must present approved scientific models showing the fuel they will produce will generate half the greenhouse gas emissions as conventional petroleum fuels over its lifecycle.