The US government released partial guidance on securing clean fuel tax credits under the Inflation Reduction Act, but fell short of finalizing key details. Biofuels groups are eager for clarity on the tax credits, which could provide a pathway for corn-based ethanol to expand its market as a feedstock for sustainable aviation fuel.
The Treasury Department issued the guidance, providing new details on how to ensure fuels meet certain emissions-reductions criteria to access the subsidy. However, biofuel trade association CEO Emily Skor stated that the guidance lacks critical details needed to help American biofuel producers and their farm partners lead the world in clean fuel production.
The administration plans to release a climate model next week, but it will not include adjustments for “climate smart agriculture practices” such as no-till farming. This omission has been met with disappointment from the ethanol industry, which had hoped that these practices could be used to meet lifecycle emissions requirements.
President-elect Donald Trump has vowed to repeal Biden’s 2022 Inflation Reduction Act, which launched the program, to pay for the extension of his tax cuts. However, doing so would require support from Congress. The Biden administration set a target to generate 3 billion gallons of sustainable aviation fuels by 2030, with air travel contributing around 2.5% of global greenhouse gas emissions making it a significant target in the fight against climate change.
Source: https://www.reuters.com/sustainability/climate-energy/us-issues-partial-guidance-clean-fuel-subsidies-chafing-ethanol-makers-2025-01-10