Kansas Corn Disappointed with Sustainable Aviation Fuel Rules

Kansas Corn Disappointed with Sustainable Aviation Fuel Rules

Kansas Corn Growers Association (KCGA) leaders are concerned by the U.S. Department of Treasury's announcement on eligibility for sustainable aviation fuel (SAF) tax credits. Corn growers had been excited for the opportunity to provide corn-based ethanol to decarbonize the aviation industry using corn ethanol-based sustainable aviation fuel. The May 30 announcement will limit opportunities for many corn farmers to benefit from tax credits available in the Inflation Reduction Act (IRA).

The IRA requires a 50 percent reduction in GHG emissions, but the update to the Department of Energy's Argonne GREET model improperly lowered corn's land use scores, raising the bar for farmers to meet the requirement. The guidance would require corn farmers to adopt three on-farm conservation practices to qualify for the tax credits - cover cropping, minimized tillage, and applying enhanced efficiency nitroge­­n fertilizer.

The narrow rules will make it difficult for Kansas farmers to participate in this potential 35-billion-gallon ethanol market and will make winners and losers based on the location of their farms, according to KCGA leaders.

"That kind of one-size-fits-all approach would leave many Kansas farmers on the sidelines due to differing climate, soil types and crop input availability in Kansas," said Josh Roe, KCGA CEO. "Allowing our producers the flexibility to decide which practices make the most environmental and economic sense given their location would benefit Kansas farmers and our state's economy."

The current guidance is only applicable through the end of this year. Work is underway to solidify the longer-term 45Z clean fuel production tax credit rules.

"KCGA is looking ahead, and is focused on ensuring corn grower interests are heard in the 45Z rule, the next version of the SAF tax credit guidelines," Roe said. "We are working to make sure farmers retain control over their farming practices and data while participating in opportunities with sustainable aviation fuel."

Kansas Corn has been meeting with aviation companies and ethanol plants to create opportunities for corn-based ethanol sustainable aviation fuel (SAF).

"We have been working with aviation companies who are excited about working with corn and ethanol producers to lower their carbon footprint using sustainable aviation fuel made with corn-based ethanol," Roe said. "Unfortunately, the guidance from the Department of Treasury will make it infinitely more difficult for corn-based ethanol to qualify by requiring growers to adopt all three conservation practices. Very few growers throughout the Corn Belt could meet the requirements."

Published May 1, 2024