Asserting that U.S. tax policy should be tied to the best standards the government has to offer, 17 of the nation’s top corn grower leaders sent a letter to Treasury Secretary Janet Yellen today encouraging her to adopt an emissions model developed by the Department of Energy as her agency works with the Internal Revenue Service to determine which biofuels lower greenhouse gas emissions enough to qualify for sustainable aviation fuel tax credits under the Inflation Reduction Act.
The letter, which was signed by the president of the National Corn Growers Association and the leaders from state grower groups across the country, calls on Treasury to use an emissions standard referred to as the GREET model, which was developed by the DOE, rather than a less comprehensive international standard preferred by some groups.
“GREET is the federal government’s most robust and updated model or methodology for transportation lifecycle assessment,” the letter says. “It is used globally to measure lifecycle greenhouse gas emissions from transportation, and the DOE has the best resources, expertise, and current ability within federal government agencies to assess lifecycle emissions accurately and scientifically.”
Unlike other models, GREET considers the full environmental picture, the corn growers noted.
“The GREET model accurately accounts for on-farm carbon reduction activities and feedstock yield increases and the improved agriculture production practices that farmers have adopted over the last twenty years,” the letter says. “This further solidifies GREET as the methodology Treasury and the IRS should use to determine tax credits for SAF under the IRA.”
The letter comes as corn ethanol, which has been used for years to lower greenhouse gas emissions from cars and trucks while saving consumers money at the pump, is being considered for use in the aviation arena where experts say the biofuel would do for airplanes what it has done for autos.
But as corn grower leaders point out, the tax credit from the IRA will be crucial to ensuring ethanol is quickly made available in the aviation sector. A decision on that tax credit could come down to which emissions model is used to determine greenhouse gas emission reductions.
Citing a recent speech in which President Biden said farmers will lead the way on aviation biofuels, the letter notes, “If we are going to make the president’s promise a reality, we are going to have to have a reliable model in place and one that bases U.S. tax policy on the best information and instruments the U.S. government has to offer.”
Yellen is expected to make a final announcement on the tax credits this month.