MANKATO, Minn. – The U.S. Department of Treasury’s announcement earlier this month regarding final guidance on eligibility for sustainable aviation fuel tax credits was met with concern from National Corn Growers Association leaders who said they are now committed to ensuring the updated guidelines for the credit are vastly improved.

The National Corn Growers Association raised specific issues with the changes the U.S. Treasury Department made to the U.S. Department of Energy’s Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model, which is used to measure greenhouse gas emissions and will be a crucial mechanism in determining who receives the tax credit.

“We are deeply disappointed that this updated model requires farmers to implement environmental practices that are not practical for all acres of the large and varied geographic region in which corn is grown,” said Harold Wolle, National Corn Growers Association president and Mankato, Minn., farmer.

In a March 21 letter, a 13-state coalition of biofuel and farm advocates, including the National Corn Growers Association called on U.S. Treasury Department Secretary Janet Yellen to swiftly resolve any questions standing in the way of efforts to scale up U.S. production of sustainable aviation fuel.

Specifically, they urged the administration to quickly adopt the U.S. Department of Energy’s GREET model for the calculation of sustainable aviation fuel tax credits under the Inflation Reduction Act – completing a process that was originally scheduled to conclude by March 1.

Passed in 2022, the Inflation Reduction Act allocates tax credits for biofuels that can demonstrate they cut greenhouse gas emissions by 50 percent or more.

But after the law was passed, the coalition said the U.S. Treasury Department and the EPA chose a model that would measure emissions throughout the life of biofuels.

“We are disappointed that the (Biden) administration did not fulfill its commitment to release a modified GREET model by March 1, but we appreciate the importance of getting the modeling right,” wrote 26 organizations across 13 states, including Clean Fuels Alliance America, Growth Energy, National Corn Growers Association, National Farmers Union, National Oilseed Processors Association, and the Renewable Fuels Association.

“At the same time, we caution against contradictory changes to GREET that would stack unwarranted penalties on agricultural feedstocks, cut rural America out of a promising green energy market, and undermine any realistic path to achieving U.S. sustainable aviation fuel goals,” the letter continued.

Corn grower leaders said they are particularly troubled the updated model requires farmers to bundle the use of no-till practices, enhanced efficiency fertilizers and cover crops for their grain to meet the standards now required to qualify for the sustainable aviation fuel tax credit.

“Many corn farmers feel that the prescribed practices may not align with their soil types, and the bundling requirement further complicates matters,” Jolene Riessen, Iowa Corn Growers Association president and Ida Grove, Iowa, farmer, told Farm World.

“Programs like this are intended to motivate farmers to continue to make improvements,” she added. “Our concern is that this program may discourage farmers from participating when there may be alternative practices that meet the objective.”

Wolle said cover crops can be difficult, if not impossible, to grow in drier climates, making the bundling requirement extremely unreasonable, adding that growers should be able to implement their own environmental practices.

“As corn growers, we already understand the environmental practices that work best for our growing conditions and climate, so it is not necessary for the government to dictate specifically how we reach an emissions reduction goal,” he said. “Farmers are going to have different methods, depending on a variety of factors, including where their farms are located.”

The National Corn Growers Association said they have been at the forefront of this issue, making a case about how ethanol can help the aviation sector meet the nation’s environmental goals.

But Wolle said the Biden administration has repeatedly said biofuels will play an important role in the decarbonization (the removal or reduction of carbon dioxide (CO2) output into the atmosphere) of the transportation sector.

“Yet, this announcement and the recently finalized Multi-Pollutant Rule issued by the EPA have left corn growers across the country grasping for ideas on just how they will be able to contribute to this effort,” he said. The finalized Multi-Pollutant Rule sets new, strict U.S. emissions standards for light- and medium-duty vehicles, including greenhouse gas emissions standards.

Wolle said the National Corn Growers Association and corn growers across the country will increase their advocacy efforts to improve the changes to the GREET model as the Biden administration focuses on the next phase of the Inflation Reduction Act for passenger vehicles, referred to as the 45Z tax credit.

The 45Z tax credit will take effect at the beginning of 2025. As part of the law, the sustainable aviation tax credit will be folded into the 45Z tax credit, beginning Jan. 1, 2025.

But the National Corn Growers Association has been concerned about the delays with the release of the sustainable aviation fuel guidance because the regulatory uncertainty is beginning to impact fuel delivery contracts already being negotiated for January 2025.

Riessen said, “Since we are in the middle of planting for the 2024 crop, the 40B tax credit (which provides tax credits for each gallon of sustainable aviation fuel sold or used by a taxpayer before Jan. 1, 2025) may be too late to motivate farmers this year.

“However, with the implementation of the 45Z ethanol production credit in 2025, it is crucial for the criteria to encompass a wider range of farming practices and to offer flexibility by eliminating the bundling requirement,” she added. “This will ensure that corn producers can effectively access the sustainable aviation fuel market.”