By Jarrett Renshaw and Leah Douglas
WASHINGTON (Reuters) – Main U.S. airways and aviation corporations joined ethanol corporations to ship a letter to the Biden administration on Wednesday backing a regulatory change that may make it simpler for sustainable aviation gas (SAF) created from corn-based ethanol to qualify for federal subsidies.
The Inflation Discount Act, President Joe Biden’s signature local weather regulation, requires SAF producers to make use of an emissions mannequin developed by the Worldwide Civil Aviation Group (ICAO), or a “comparable methodology”, to point out their gas cuts emissions over gasoline by 50% to safe the subsidies.
Airways together with Delta , JetBlue , and Southwest , and firms like GE Aerospace and Boeing , mentioned within the letter to Treasury Secretary Janet Yellen that the administration ought to permit using the Division of Power’s Greenhouse Gases, Regulated Emissions and Power Use in Applied sciences (GREET) mannequin along with the one developed by ICAO, echoing a request from the ethanol trade.
The ethanol trade believes the GREET mannequin is extra seemingly than the ICAO mannequin to bear out the required local weather advantages to safe IRA subsidies.
Environmental teams argue, nevertheless, that the GREET mannequin underestimates ethanol’s emissions, notably these related to clearing land to develop the crops required to make ethanol.
“With the best market alerts, we will de-carbonize aviation and spur a brand new wave of U.S. innovation and clear power jobs. Nonetheless, modeling uncertainty at this time is a multiyear improvement downside,” mentioned the letter, which was additionally signed by ethanol corporations together with Poet and Archer-Daniels-Midland Co .
The letter comes the identical day Biden and his administration kick off a two-week give attention to rural America, beginning with a go to to Minnesota on Wednesday.
The ultimate determination on the modeling query sits with Treasury, although the agriculture, surroundings and power departments have additionally weighed in and the White Home has stepped in to mediate, in keeping with prior Reuters reporting.
The USDA mentioned in September that it updating the GREET mannequin to make sure that ethanol is eligible as an SAF feedstock.
A choice from Treasury is predicted in December, in keeping with prior Reuters reporting.
(Reporting by Leah Douglas; Modifying by Marguerita Choy)
