Growth Energy to IRS: Ethanol Ready for SAF Spotlight

WASHINGTON, D.C.–In a letter submitted today, Growth Energy, the nation’s largest biofuels trade association, urged the U.S. Internal Revenue Service (IRS) to include the U.S. ethanol industry in its effort to reach the Biden administration’s goals for the expanded use of sustainable aviation fuel (SAF). Specifically, the administration’s SAF Grand Challenge pledges to reach 3 billion gallons of SAF production per year by 2030 and 35 billion gallons per year by 2050.

“To meet these goals, it will be necessary to harness the U.S. ethanol industry, which at 17.4 billion gallons per year accounts for over 80% of biofuels production capacity in the U.S.,” said Growth Energy in the letter. “Ethanol is one of the few readily available feedstocks for SAF production that can be utilized in the aviation sector if the proper economic conditions are in place and if lifecycle analysis of greenhouse gas emissions associated with ethanol-to-jet (ETJ) SAF is conducted properly.”

Under the Inflation Reduction Act (IRA), IRS is responsible for the implementation of the bill’s SAF tax credits included in sections 40B and 45Z. How large these incentives are, and who is eligible to receive them, will be determined by what lifecycle analysis (LCA) model IRS chooses to use in its assessments of potential SAF sources and feedstocks. In its letter, Growth Energy called on IRS to rely on the best available science to accurately account for the emissions profile of biofuels, in particular by using the Greenhouse Gases, Regulated Emissions, and Energy Use in Technologies (GREET) model developed by the Department of Energy’s Argonne National Laboratory.

“When implementing the Section 40B and 45Z SAF tax credits, IRS must ensure LCA methodologies used for calculation of credits reflect the best available science so as to incentivize increased production of low carbon-intensity SAF in order to further Congress’ core objective of accelerating the reduction of GHG emissions from the U.S transportation system,” the letter said. “Implementing the statute in this matter is critical to the decarbonization and continued economic competitiveness of the U.S. aviation sector.”

The letter also highlighted the increasing efficiency of the U.S. biofuels sector and outlined the reasons why other LCA models aren’t as accurate as GREET. Read the full letter here.