(Bloomberg) -- US corn farmers and biofuel producers are poised to gain from turning ethanol into sustainable jet fuel — depending on how Washington writes the tax policy.
That’s the message from ethanol maker Green Plains Inc. Chief Executive Officer Todd Becker at a conference on sustainable aviation fuel, or SAF, in Minneapolis. Makers of crop-based biofuels are pushing the Biden administration to help them take full advantage of tax credits in the landmark Inflation Reduction Act.
The hurdle lies in disagreement on how to track emissions from SAF, which can be made from a wide range of materials. The decision is seen as key as the US ethanol industry is counting on SAF to help revive demand in upcoming years, with gasoline consumption expected to decline as more electric cars take over the roadways.
Biofuel producers and farm state lawmakers are pushing for a model used by the US Energy Department that would give credit for carbon sequestered in soil even after crops are removed. Environmentalists seek what they consider a more rigorous model that factors in changes in land use driven by biofuel production. The latter could prevent some ethanol-based sustainable aviation fuel production from qualifying for the tax credit.
Becker’s comments come as he attempts to show investors his goal of expanding Green Plains beyond a traditional ethanol maker and into new markets including SAF will pay off. The CEO is already facing scathing criticism from activist shareholder Ancora Holdings Group LLC over performance as well as recent stock sales.
Guidance from the Treasury Department on the climate law’s potentially lucrative provisions is expected as early as September, Becker said.
--With assistance from Jennifer A. Dlouhy.
©2023 Bloomberg L.P.
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