The Biden team is charting a path for ethanol jet fuel subsidies. By Reuters

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(Reuters) -President Joe Biden’s administration released guidance on Tuesday on its sustainable aviation fuel (SAF) subsidy program, making corn-based ethanol eligible for the program if it comes from farms that use climate-friendly growing techniques.

The plan will likely be bittersweet for the politically powerful U.S. ethanol industry, which is eager to secure the subsidies but had hoped for a lower threshold.

Air travel is responsible for about 2% of CO2 pollution in the US to date and is one of the fastest growing sources.

Biden hopes that creating a subsidized market for low-emission SAF can counter that threat while boosting farming, a key constituency in November’s presidential election.

“Sustainable jet fuel is an important part of the Biden-Harris administration’s efforts to transition the American economy to a clean energy future and rebuild the middle class from the bottom up to the heart of rural America,” said Secretary of Agriculture Tom Vilsack.

SAF can be made from corn, soy or other agricultural products. But to access the SAF subsidies that make it economically viable to produce, refineries must demonstrate that their fuel has at least 50% lower emissions than petroleum jet fuel.

Ethanol-based SAF can only meet that threshold, according to the guidelines, if corn farmers use a bundle of agricultural practices, including no-till, crop cover and efficient application of fertilizer that sequesters carbon in the soil.

Soy-based biodiesel is also eligible if the soy farms use a combination of no-till and cover cropping, the announcement said.

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Recognition of so-called climate-smart agricultural practices in the subsidy program will be effective for fuels produced in 2023 and 2024, after which they could be adapted or expanded, officials said.

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The SAF subsidies are $1.25 per gallon for fuels that meet the 50% emissions reduction threshold, and up to $1.75 per gallon for fuels that exceed this threshold.

The plan was based on an update of the GREET climate model that includes life cycle emissions from ethanol and other biofuels under different conditions, and also includes the climate impact of related land use changes.

The industry group Renewable Fuels Association said it was encouraged by the announcement.

“However, RFA believes that fewer regulations on agricultural practices, more flexibility and additional low-carbon technologies and practices should be added to the modeling framework to better reflect the innovation taking place across the supply chain,” said the group’s president and CEO, Geoff Cooper. .

Some environmental groups and researchers are concerned that the SAF strategy will not deliver the climate benefits promised, in part because of scientific uncertainty about the benefits of landless or cover crop farming techniques and the vast amounts of fuel that will be needed.

“The bottom line is that to decarbonize aviation, U.S. airlines need a volume of alternative fuels that sustainable biomass alone cannot meet,” said Mark Brownstein, senior vice president of energy transition at the Environmental Defense Fund.

Bill Hohenstein, director of USDA’s Office of Energy and Environmental Policy, said the administration is confident in the plan. “We have robust data, analysis, information and models that all support the conclusion that these practices deliver greenhouse gas benefits,” he said.

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