Ethanol Industry Eyes 2025 Clean Fuel Tax Credit for SAF

The ethanol industry is keeping a close eye on the pending Treasury Department Clean Fuel Tax Credit, a key for sustainable aviation fuel after a just-finished credit quickly expires.

The now final 40B tax credit for biofuel-based sustainable aviation fuel or SAF was late in coming and will soon run out. “The tax credit expires December 31st,” according to Troy Bredenkamp with the Renewable Fuels Association. “And there is just not the production that is ready to utilize that tax credit yet.”

So, Bredenkamp says RFA is now focused on the next version of a SAF credit—the Clean Fuel Tax Credit. “We’re going to make sure that it’s using the best science under the Argonne GREET model. They will probably modify that to include some other things, and they will call it a 45 Z GREET model. But, at the end of the day, it has to make sure that row crop biofuels like corn ethanol have a role to play in that clean fuel production area.

Bredenkamp says the RFA is working on a carbon-intensity credit trading system that gives farmers extra income from selling credits to ethanol producers and removes the problem of segregating grain. He says, “That farmer’s going to have this certificate showing those carbon intensity attributes through the climate smart ag practices that he employed. And then that’s going to be something that can be tradeable and marketable to those who are looking for those carbon intensity reductions, like our ethanol plants.”

Opening a huge potential market for corn and soybean growers. Will SAF reach the administration’s goal of 36 billion gallons by 2050? Bredenkamp says it’s a tall order but feels the ethanol industry can make a dent and a huge contribution to the airline fleet.

Story by Matt Kaye/Berns Bureau courtesy of NAFB News Service