Today, the U.S. Department of the Treasury issued final guidance on eligibility for one of the Sustainable Aviation Fuel (SAF) tax credits under the Inflation Reduction Act of 2022. The standalone blenders credit (40B) is available for fuel that reduces lifecycle greenhouse gas emissions by at least 50%. The Minnesota Corn Growers Association (MCGA) is particularly concerned with the changes Treasury made to the Department of Energy’s GREET model, which will be used to determine eligibility for the credit. 

The updated model requires farmers to bundle the use of no-till practices, enhanced efficiency fertilizers, and cover crops for their grain to meet the standards now required for SAF producers to qualify for the tax credit.  

“It’s unreasonable for the administration to expect growers to implement this specific bundle of carbon-smart agriculture practices before the 40B tax credit expires at the end of 2024. Unless the administration changes course for 45Z Clean Fuel Production Credits , which expire at the end of 2027, opportunities for corn to qualify as SAF feedstock will be limited,” said Minnesota Corn Growers Association President Dana Allen-Tully. “It’s especially unfortunate because there is a suite of science-backed climate smart agriculture practices farmers can implement that can achieve the same outcomes as the prescriptive approach outlined by the administration.” 

According to the 2022 U.S. Census of Agriculture, 4.1% of Minnesota cropland has a cover crop and 6.4% is no-till. MCGA anticipates that farmers will continue to make strides in the implementation of these practices due to USDA’s climate smart commodities projects being implemented across Minnesota. The low number of farms that would produce corn using the prescriptive agriculture practices within the 40B timeline could impact a biofuel producer’s ability to source qualifying feedstocks. 

SAF produced with corn as a feedstock is one of the solutions to the administration’s goal of producing 3 billion gallons of SAF by 2030. Now, producers and farmers have had another tool removed from the toolbox to build toward that goal. 

MCGA recognizes the value of the climate-smart practices outlined by the administration, but stresses that there is no one-size-fits-all approach to reducing carbon intensity “It’s important that farmers have the flexibility to implement climate-smart ag practices that work best for their respective operation, and the administration’s requirements strip options for corn to qualify as an SAF feedstock,” Allen-Tully said.

“MCGA is disappointed that the 40B tax credit guidance takes this approach, and we will be working hard with the administration and elected officials for a more workable solution for the 45Z tax credit that recognizes the suite of climate-smart ag practices that can achieve the same outcomes,” Allen-Tully said.