New Treasury tax credit guidance for sustainable aviation fuels enhances carbon intensity assessments, better accounts for indirect land use change emissions
The sustainable aviation fuels (SAF) credit guidance issued today by Department of Treasury further capitalizes on the 2022 Inflation Reduction Act’s (IRA) enormous potential to mitigate climate change by requiring producers of sustainable aviation fuels to demonstrate that their products deliver clear environmental benefits.
“The climate impact of the SAF credit depends in large part on Treasury’s ability to identify and reward those biofuels that actually reduce net emissions to the atmosphere,” said Jonathan Lewis, Director of Transportation Decarbonization at Clean Air Task Force. “Today’s guidance shows that the government is taking that job seriously.”
Airplanes emit almost a billion tons of carbon dioxide every year. Fully decarbonizing the sector will require, at a minimum, the development and deployment of aviation fuels that add little to no greenhouse gas to the atmosphere.
Congress put the SAF tax credit in IRA to encourage the production of “drop-in” aviation fuels made through innovative processes that utilize agricultural residue, recycled cooking oils, clean hydrogen, captured carbon atoms, and other climate-beneficial feedstocks. To qualify for the credit, which is worth as much as $1.75 per gallon, the lifecycle carbon intensity of the fuel must be at least 50% lower than that of conventional petroleum-derived jet fuel.
Determining the net volume of greenhouse gas (GHG) emitted across a fuel’s full lifecycle requires carefully constructed and calibrated lifecycle assessment tools. Clean Air Task Force and other organizations urged federal agencies, including Treasury and the U.S. Department of Energy, to make two critical improvements to the GREET modeling tool that they will use to conduct lifecycle GHG assessments for biomass-based SAF:
- First, to protect the scientific integrity of the carbon intensity assessment process that will underpin Treasury’s issuance of SAF tax credit, GREET must be updated so that it uses data or assumptions that properly account for the extent to which biofuel feedstock production results in climate-harming indirect land use change.
- Second, the version of GREET that Treasury utilizes must not give credit for claimed improvements in soil organic carbon levels on fields where biofuel feedstock crops are grown, because of the enormous uncertainty and variability associated with soil organic carbon measurements.
The guidance issued today incorporates both of our recommendations by making sure that any carbon intensity assessments based on GREET will more fully account for indirect land use change-related emissions and by limiting undue reliance on claimed improvements in soil organic carbon levels. Another implication of Treasury’s guidance on appropriate tools for analyzing carbon intensity is that existing processes for making jet fuel from corn ethanol are unlikely to qualify for the tax credit, which should encourage the ethanol industry to accelerate plans to capture and sequester carbon dioxide emissions from their facilities.
Contacto con la prensa
Steve Reyes, Director de Comunicación, CATF, [email protected], +1 562-916-6463
Acerca de Clean Air Task Force
Clean Air Task Force (CATF) es una organización mundial sin ánimo de lucro que trabaja para protegerse de los peores impactos del cambio climático catalizando el rápido desarrollo y despliegue de energías bajas en carbono y otras tecnologías de protección del clima. Con 25 años de experiencia reconocida internacionalmente en política climática y un compromiso feroz para explorar todas las soluciones potenciales, CATF es un grupo de defensa pragmático y no ideológico con las ideas audaces necesarias para abordar el cambio climático. CATF tiene oficinas en Boston, Washington D.C. y Bruselas, con personal que trabaja virtualmente en todo el mundo.
