Federal decisions could benefit ethanol, corn growers
The end of 2023 included two ethanol-related developments that present opportunity for corn farmers. In December, two federal agencies announced decisions that could lead to increased ethanol use, benefiting corn farmers and all U.S. residents through decreased greenhouse gas (GHG) emissions.
On Dec. 15, the U.S. Treasury Department announced which model it will use to determine lifecycle GHG emissions to qualify for sustainable aviation fuel (SAF) tax credits under the Inflation Reduction Act. The Department will use the U.S. Department of Energy’s GREET Model, the most accurate and up-to-date methodology for determining lifecycle GHG emissions.
On Dec. 18, the U.S. Environmental Protection Agency (EPA) sent a final rule to allow permanent year-round E15 sales in eight Midwestern states, including Minnesota, to the Office of Management and Budget (OMB). E15, which has 15% ethanol, is also known as Unleaded 88 because of its 88 octane rating.
Here is more information on how the decisions affect corn farmers.
GREET Model
The decision to use the GREET Model for SAF tax credits means ethanol-based jet fuel has a path to reaching a 50% reduction in lifecycle GHG emissions compared to petroleum-based jet fuel. That’s the threshold for qualifying for the credits, which are key to spurring SAF development. Another model that had been under consideration contains outdated information and obsolete data on the carbon intensity of corn ethanol-based SAF.
Ethanol-based jet fuel could increase demand for ethanol producers and family corn farmers, benefiting rural communities and Minnesota’s economy. Use of ethanol-based jet fuel would also decrease GHG emissions associated with air travel.
There is significant potential nationwide for the use of jet fuel made from renewable sources such as ethanol. The Biden administration has set the goal of ensuring the U.S. produces 3 billion gallons of SAF by 2030 and enough SAF by 2050 to meet the country’s entire aviation fuel demand.
SAF is considered jet fuel made from renewable sources that reduces lifecycle GHG emissions at least 50% compared to petroleum-based jet fuel. It can be made from multiple feedstocks, from oil seeds, to cooking oils and sugarcane.
Ethanol is expected to be a significant feedstock for SAF, given its abundance and the availability of infrastructure capable of safely and efficiently delivering the fuel.
Given SAF’s potential benefits to corn farmers and rural communities, the Minnesota Corn Growers Association (MCGA) is advocating for policies and regulations that allow for the technology-neutral development of the fuel. Look for more information from Minnesota Corn in the coming weeks and months about efforts to increase the availability and scale of SAF production.
Year-round E15
The advancement of the EPA rule to the OMB means that permanent year-round E15 in the eight Midwestern states is one step closer to becoming reality. The eight states are Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin.
E15 is approved for use by the EPA in cars, trucks, and SUVs model year 2001 and newer and is available at approximately 500 Minnesota fuel stations. Year-round Unleaded 88 accessibility is incredibly important for Minnesota because we lead the nation in our ethanol blend rate and the number of retail locations offering higher ethanol blends. Because of outdated federal regulations, consumers have historically lost access to higher blends of ethanol during the summer months. You can find an Unleaded 88 station near you at BetterFuel.org.
Permanent year-round E15 will benefit family corn farmers, rural communities, and consumers through reduced GHG emissions and lower costs at the pump. MCGA encourages OMB to expediently review the rule so it can be finalized and looks forward to seeing year-round E15 sales in the eight Midwestern states. The organization continues encouraging Congress to pass a permanent year-round E15 fix nationwide. One avenue for doing that would be the Next Generation Fuels Act, which would also pave the way for higher blends of ethanol in the U.S. gasoline supply.
We would also like to extend a very special thank you to members of Minnesota’s congressional delegation who have been champions for using the GREET model to certify SAF tax credits and securing permanent year-round Unleaded 88 access in Minnesota. Those members include Senators Amy Klobuchar and Tina Smith and Representatives Angie Craig, Brad Finstad, and Michelle Fischbach.
