Biden Administration finally unveiled guidance concerning sustainable aviation fuel (SAF) credits, featuring more stringent agricultural practice criteria than initially anticipated.
The guidance introduces the 40B SAF-GREET 2024 model, a tool for SAF producers to calculate their fuel’s lifecycle emissions for credit purposes. This updated model incorporates new data and methodologies to accurately assess the environmental impact of SAF production. This includes a pilot program from the Department of Agriculture (USDA) that necessitates the use of Climate Smart Agriculture (CSA) practices for SAF producers to become eligible for credits.
For corn ethanol-to-jet, the pilot provides a greenhouse gas reduction credit if CSA practices of no-till, cover crop, and enhanced efficiency fertilizer are used.
The model would similarly would allow a GHG credit for soybean-to-jet if the soybean (HEFA pathway) feedstock is produced using applicable CSA practices: no-till and cover crop. This is a pilot program specific to the 40B credit, which is in effect for 2023 and 2024.
Based on current and likely near-term SAF production, seven relevant feedstocks were identified for the two SAF production technologies modeled in 40BSAF-GREET 2024. This results in seven distinct SAF pathways as shown below:
- U.S. soybean HEFA
- U.S. and Canadian canola/rapeseed HEFA
- Tallow HEFA
- Used cooking oil (UCO)8 HEFA
- U.S. distillers corn oil HEFA
- U.S. corn ATJ-Ethanol
- Brazilian sugarcane ATJ-Ethanol
The guidance said the agencies will develop a new model for the Clean Fuel Production Credit (45Z) which takes effect in 2025, incorporating learnings from the pilot and further refining data and verification methods.
Producers can earn between $1.25 and $1.75 per gallon depending on the level of emission reduction achieved. As per the guidance, SAF that achieves a GHG emissions reduction of 50% is eligible for the $1.25 credit per gallon amount, and SAF that achieves a GHG emissions reduction of more than 50% is eligible for an additional $0.01 per gallon for each percentage point the reduction exceeds 50%, up to $0.50 per gallon.
The Treasury Department collaborated with several agencies, including the Environmental Protection Agency (EPA), Department of Transportation (DOT), USDA and Department of Energy (DOE).
“SAF is a key part of the Biden-Harris Administration’s efforts to transition the American economy to a clean energy future and rebuild the middle class from the bottom up to the middle out in rural America,” said Tom Vilsack, US Secretary of Agriculture.
The rules define the three CSA practices in detail.
No-till: Limiting soil disturbance to manage the amount, orientation and distribution of crop and plant residue on the soil surface year-round.
Cover Crop: Grasses, legumes, and forbs planted for seasonal vegetative cover.
Enhanced Efficiency Nitrogen Fertilizer (EENF) (corn feedstock): Enhanced nutrient use efficiency technologies are utilized to improve nutrient use efficiency, reduce risk of nutrient losses to surface and groundwater, and reduce GHG emissions.
