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SAF Future Hangs on Treasury Tax Rule

The future of a massive new biofuels market hangs on Treasury Department guidance for sustainable aviation fuel tax credits. It’s a potential 36-billion-gallon market, but it won’t happen unless the Treasury Department makes it possible.

Renewable Fuels Association President and CEO Geoff Cooper, “We are waiting for the Treasury to come out with that guidance that will explain to the industry how eligibility will be determined for these tax credits. We have been pushing hard to ensure that the most current methodology, the best information, and the best science gets used for those eligibility determinations.”

Specifically, Cooper points to a holistic life-cycle approach to measuring carbon emissions at all stages of ethanol production. Cooper says, “Using the Department of Energy’s GREET model for determining eligibility, and we’re expecting guidance from Treasury. I’m hearing, most recently, we could see it by the end of the year.”

Guidance that could determine if the biofuels industry gets the tax credits needed to make expensive SAF more attractive to the airlines and boost investment in the fuel.

Cooper says, “We’re looking for methodologies that will deem eligible the largest volume of feedstocks and biofuels. If, instead, we end up with guidance that only allows waste-derived SAF to qualify for the tax credit, it’s going to have a chilling impact on investment in SAF.”

The ethanol industry was encouraged by the recent first-ever trans-Atlantic flight by Virgin Air using 100 percent sustainable aviation fuel. The airline claims it reduced carbon emissions by 70 percent over conventional oil-based jet fuel.

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