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Trade, E15, GREET, tax credits the talk at Commodity Classic
Ohio Correspondent

HOUSTON, Texas —  Brian Warpup, Committee Chair Member of the Indiana Soybean Alliance (ISA) and soybean farmer from Warren, Ind., was among 2,000 people who attended the Commodity Classic at the George R. Brown Convention Center recently in Houston. Warpup and other agriculture leaders were eager to hear the keynote talks by U.S. Secretary of Agriculture Tom Vilsack and EPA Administrator Michael Regan.
 “It turned out to be more of a feel-good meeting, but stagnant at the time as there was no talk of the Farm Bill or the budget. It was a positive gathering but more of an update of what’s going on,” Warpup said.
 While the gathering expected announcements on many ongoing projects, they came away a bit disappointed. For example, while attendees had expected an announcement of updated Treasury Department guidance on the Department of Energy’s (DOE) GREET system and sustainable aviation fuel (SAF) tax credits for 2024 and 2025. Unfortunately, Vilsack said he was not in a position to announce guidance on March 1, the previously announced deadline.
 The DOE developed the model to better evaluate the environmental impact of fuels throughout their lifespans. It uses multiple factors to determine how “sustainable” a fuel is. The score produced by the model determines which products qualify for tax credits. The delay, Vilsack, was inevitable.
 “The reason we’re not announcing today is because we’re measuring twice and cutting once,” Vilsack said. “We want to make sure that the latest and best information is utilized in the modeling that will inform the Treasury.”
 Biofuel advocates have long argued that current federal guidelines put them at a disadvantage compared to electric vehicles. When other factors are taken into consideration, they believe plant-based fuels are more environmentally friendly than current modeling reflects.
 At issue are potential tax credits that many hope will spur innovation within the sustainable aviation fuel market. According to Vilsack, part of the reason for the delay was to ensure that the GREET model was adopted, something he is now confident will happen.
 “The administration made a clear commitment to finalize this guidance no later than March 1. This delay is frustrating,” said Growth Energy CEO Emily Skor. “American bioethanol producers must be allowed to compete in the SAF marketplace. The alternative is making SAF from Brazilian sugar cane, or used cooking oil imported from China, instead of renewable crop-based feedstocks grown on American farms.”
 “While we are pleased to hear progress is being made on the modified GREET model, we’re disappointed by this additional delay,” said Renewable Fuels Association President and CEO Geoff Cooper. “To meet the Biden Administration’s SAF goals, the marketplace needs certainty and clarity. Investment and innovation in SAF technologies will remain frozen until the model is finalized and additional guidance is issues.”
 The other thing Vilsack hopes to ensure is that the feedstock used to produce biofuels qualifies for the tax credits, particularly the feedstocks that are generated from climate-smart practices.
 “We have to make sure that the guideline is correct, that it acknowledges the work that’s being done in reducing greenhouse gas emissions relative to the transportation fuels and the good work that’s being done out in the field to embrace climate-smart practices,” Vilsack said.
 In a press conference following the general session, Vilsack said the process was difficult due to the evolving state of sustainability practices.
 “I think we’re gonna get there, and I think when we get there at the end of the day, we’re going to do what needs to be done for this industry, which is to create multiple ways to get to the point that you can say, ‘Our fuel is more environmentally beneficial than jet fuel by a certain amount and should qualify for a fairly significant tax credit,’” Vilsack said.
 Like biofuel markets in the past, the final details in the federal policy will play a key role in the future of the massive potential SAF for corn and soybeans.
 “The story on SAF is being written as we speak. A lot has to do with policy and part of what has to happen for corn ethanol to play a part in that SAF is good policy and it is right now being decided,” said Tadd Nicholson, with Ohio Corn and Wheat. “It has to do with really obscure things like which computer model they use to judge the carbon intensity score of corn ethanol.”
 In other pressing issues, Vilsack also talked about renewed emphasis on facilitating international trade for U.S. agricultural products.
 “It’s important for us to diversify our markets away from the reliance on the Chinese market,” Vilsack said. “We’re looking at opportunities in Southeast Asia and in Central America and in South America and it was for that reason we utilized resources under the Commodity Credit Corporation to establish the Regional Agricultural Promotion (RAP) Program. Those are resources that we can put into ag marketing where we’ve not had increases for quite some time.”
 To which Warpup and others agree. 
 “China is always a big market, but it’s important to find other markets around the world to move our corn and soybeans,” Warpup said. “As a farmer, inputs and high and commodity prices are down now. The EPA, USDA and others are trying to be more competitive worldwide, in ways of finding new markets.”
 Vilsack used his stage time to announce his plans for a trilateral trade meeting with agriculture ministers from Mexico and Canada this month. The meeting, he added, will be held in. It will involve Canada’s agriculture minister Lawrence MacAulay and Mexico agriculture secretary Victor Villalobos.
 “This meeting needs to take place sooner than later,” said Chris Cherry, President of the Indiana Corn Grower’s Association and corn grower from New Palestine, Ind. “We need to pull Mexico to the agreement that they already agreed to as far as using biotech corn.”
 Another item of interest was the establishment of a new EPA office (called the Office of Agricultural and Rural Affairs) to handle its relations with farmers and ranchers, a key constituency that can be a trouble spot for the agency. This newly created office will not be located in Washington, D.C., rather somewhere in the rural sector.
 “It’ll be a liaison between rural America and Washington D.C.,” Warpup said. “The EPA and USDA are trying to work more together and they haven’t done that in the past. If these two offices can work together a little more I think it’s a positive for the American farmer. Because when you say ‘EPA’ is seems like a bad word. But if there are issues maybe they can be resolved more quickly thanks to the formation of this new office.”
 Vilsack said the new office will be similar to an FSA agency and more public.
 “The EPA and farmers, that’s not normally compatible groups, but it’s our feelings that the EPA wants to have a better understanding of what’s going on in ag,” Cherry said. “The EPA needs to have a better understanding of what our needs are and how we go about things, so we see that as a good thing.”
 Other ISA attendees at the Commodity Classic were Keevin Lemenager (Monrovia), Jim Douglas (Flat Rock) and Larry Rusch (Vincennes).
 The 2025 Commodity Classic will be held March 2-4 in Denver, Colorado.