SAF Tax Credit Needs Better Carbon Analysis, Biofuel Organizations Urge
U.S. agriculture and biofuel organizations have urged the U.S. Congress to base a proposed tax credit for sustainable aviation fuel (SAF) on the most updated and accurate lifecycle carbon assessment methods and not the modeling used by the ICAO.
In an Aug. 6 letter to House and Senate committee leaders, the organizations urged Congress to make the Energy Department (DOE) the lead agency in establishing a regularly updated lifecycle carbon assessment (LCA) for any SAF tax credit.
Biofuels achieve a reduction in greenhouse-gas emissions over the lifecycle of carbon—from the sequestration of atmospheric carbon dioxide by plants, through the production and distribution of jet fuel, and to the release of CO2 back into the atmosphere by combustion in engines.
To offset the higher cost of SAF and promote its production and use in the U.S., the Sustainable Skies Act introduced in June would establish a $1.50-per-gallon blender’s tax credit for fuel that achieves at least a 50% reduction in lifecycle greenhouse-gas emissions compared with conventional fossil-based jet fuel.
Fuel purchasers would receive another penny-per-gallon credit for each percentage point in reduction in lifecyle emissions above 50%, up to $2 per gallon for a 100% reduction. Under the legislation, the tax credit would be in effect until 2030 to help drive growth of SAF production.
“Because biomass feedstocks are essential SAF sources, it is imperative that the tax credit properly account for the lifecycle emissions of these sources and the petroleum products these new fuels will replace,” the organizations wrote.
“Without a sound LCA as its basis, a SAF tax credit will be significantly less effective in driving investment in new fuels and reducing aviation emissions,” they said, adding, “Our organizations could only support a SAF tax credit with a sound LCA as its basis.”
As currently proposed, the legislation relies on LCA modeling from the ICAO, which “does not use the most comprehensive modeling approaches or the most recent data for some important SAF pathways, with some data more than a decade old,” the letter said.
The DOE has the resources, expertise and ability to assess lifecycle emissions fairly and scientifically, whereas the U.S. Environmental Protection Agency does not maintain a regularly updated LCA model or methodology for biofuels, the organizations argued.
Additionally, the LCA for fossil jet fuels used to establish the baseline carbon intensity for assessing SAF emission reductions “must also be based on the most recent and accurate data to ensure a fair comparison is made between fuels,” the organizations urged.
“Our recommendation for a sound, sustainable and effective SAF tax credit is to ensure the legislation allows a DOE-led LCA, unencumbered by ICAO, utilizing [U.S. Department of Agriculture] expertise on agriculture feedstocks,” the letter said.
“Without these reforms, the federal government’s desire to promote and develop robust domestic SAF production capabilities as quickly as possible will be put at serious risk,” the organizations warned.