U.S. corn producers are anxiously awaiting a ruling on whether corn ethanol will qualify for an environmental tax credit as aviation fuel for jets.
The decision was supposed to be announced at the beginning of March, but unexpectedly Secretary of Agriculture Tom Vilsack announced to growers that the government needed more time to think about this issue. This may take several more months.
As part of its climate policy, the government announced a shift in the production of fuels, which will now include biocomponents. The problem is that, for example, diesel oil with the addition of soybean oil is much more expensive to produce than conventional fuel. Therefore, this market is completely dependent on tax breaks. American corn growers are counting on the same relief, as they desperately need a new source of demand, because the oversupply of grain in the world has caused a decline in prices and profitability of the crop.
Harold Wolle, president of the National Corn Growers Association, fears, however, that the aviation industry will not want ethanol from corn, and the government prefers to avoid subsidizing this production. According to the industry association’s website, the U.S. Treasury is still considering how to measure greenhouse gas emissions when granting tax credits for “sustainable” aviation fuels.
This is mainly about a model for such calculations. The US Act of 2022 allocates $1.25 for each gallon of sustainable aviation fuel in a qualified blend. However, biofuel must reduce greenhouse gas emissions over its entire life cycle by at least 50%.
– .
