U.S. Biofuel makers seeks changes to aviation fuel tax credit

By Nneka Nwogwugwu

Biofuel producers are seeking changes to a proposal to boost production of sustainable aviation fuel tucked in the Democrat’s $3.5 trillion spending plan that they say will allow the nation’s farmers to join the emerging multi-billion market.

The changes centers on how the carbon-saving benefits of producing the fuel are measured, and could force the White House to choose between environmental groups who believe using land and food supply for fuel squanders earth’s resources, and farm and agribusiness groups hoping to benefit from the push to stop climate change.

The White House said last week it wants to cut aircraft greenhouse-gas emissions by 20% by decade’s end by significantly boosting the use of sustainable aviation fuel (SAF).

Currently, less than 1% of the roughly 21.5 billion gallons of jet fuel burned each year in the United States is SAF, but the White House set a target of 3 billion gallons by 2030.

It has backed a $1.75 to $2 a gallon tax credit for sellers and users of sustainably produced fuel to offset the higher cost, which can be up to three times more than regular fuel.

SAF is currently produced from used cooking oil and animal fat, and even supporters of the increased targets consider the goal ambitious.

Biofuel groups say it’s completely impossible without tapping into feedstocks like ethanol and soybean oil, and want the current model used to determine eligibility for the tax credit to be changed to allow them to participate, Reuters reports.

Biofuel
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