Biden Administration Rule Blocks Ohio Crops from Sustainable Aviation Fuel Markets

Ohio corn farmers are frustrated with the U.S. Department of the Treasury’s announcement yesterday on eligibility for the Sustainable Aviation Fuel (SAF) tax credits enacted in the Inflation Reduction Act (IRA). 

This week’s update to the Department of Energy’s Argonne GREET model states that corn-based ethanol must be grown with three additional on-farm conservation practices to apply for tax credits available in the IRA – cover cropping, zero tillage, and nitrogen management. 

The IRA credit requires a 50 percent reduction in greenhouse gas emissions. However, the administration’s announcement limits farmers’ options to reach emission targets.  

“Sustainable aviation fuel markets should be based on meeting a carbon intensity score, not federal regulators dictating how farmers get there,” said Tadd Nicholson, executive director at Ohio Corn & Wheat. “Ohio farmers are constantly innovating, but placing arbitrary restrictions around practices that can’t be universally adopted is killing the SAF industry before it ever gets off the ground.” 

On average, as little as three percent of Ohio’s cropland acres are classified as using cover crops. With this week’s update, the number of corn bushels that could be utilized for these tax credits would be negligible.  

“Ohio farmers can’t afford to be left out of this market opportunity, especially in a season of tighter margins,” said Denny Vennekotter, Putnam County farmer and president of the Ohio Corn & Wheat Growers Association. “We can grow corn that has a low carbon intensity score and should have the freedom to figure out what works best for our own farms, our climate and conditions.” 

The Inflation Reduction Act, passed in 2022, allocates tax credits for biofuels that can demonstrate that they cut greenhouse gas emissions by 50% or more. After the law was passed, Treasury and EPA were charged with choosing a model that would measure emissions throughout the life of biofuels. 

The National Corn Growers Association (NCGA) has been at the forefront of this issue, making the case about how ethanol can help the aviation sector meet the nation’s environmental goals. But recent developments have made growers question the Biden administration’s commitment to using ethanol as a climate solution.

“President Biden has repeatedly said that biofuels will play an important role in the decarbonization of the transportation sector,” said Harold Wolle, Minnesota farmer and president of the National Corn Growers Association. “Yet, this announcement and the recent 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.”

NCGA leaders say they will continue to advocate for the promise corn provides for sustainable aviation fuel while turning their attention to the portion of the Inflation Reduction Act for passenger vehicles, referred to as the 45Z tax credit, which will take effect at the beginning of 2025. As part of the law, the aviation tax credit will be folded into the 45Z tax credit beginning on January 1, 2025.