NEW YORK - The Biden's Administration will likely delay its decision whether to make it easier for sustainable aviation fuel (SAF) made from corn-based ethanol to qualify for subsidies under the White House's climate law, according to sources familiar with the discussion.
The administration has been divided over the issue, prompting lobbyist from U.S. Farm Belt stakeholders who see SAF to be crucial for the ethanol market's growth. Environmental groups say clearing land to grow crops for fuel is counterproductive to curbing global warming.
The decision was tentatively scheduled for September; now, it looks like December.
At issue is a requirement of the 2022 Inflation Reduction Act that SAF producers seeking tax credits must demonstrate scientific evidence that their fuel generates 50% less greenhouse gas emissions.
Midwest ethanol producers have asked the WH to adopt a model that would enable ethanol based SAF to qualify. Environmentalists want standards favoring inputs like used cooking oil and animal fat.
The administration's decision will determine who benefits from billions of dollars in subsidies. (Reuters 09/06/23)
Regional SAF Notes: Global oil giant Shell in 2022 planned to re-purpose its Gulf Coast refinery, located NW of New Orleans, to produce hydrotreated vegetable oil (HVO) and sustainable aviation fuel. Shell to re-purpose Gulf Coast refinery to produce HVO and SAF (ofimagazine.com)
* DG Fuels, an emerging leader in drop-in SAF production, had announced a long-term agreement with an undisclosed investment grade industrial buyer to sell up to 46M gallons of SAF annually from its initial plant in Louisiana. The first commercial scale project is expected to create about 633 new operating jobs and up to 2,100 construction jobs by 2024 in St. James Parish.
* Grön Fuels is considering building a $9.2 billion biofuel plant at the Port of Greater Baton Rouge. The company has said it expects to start providing SAF to JetBlue by 2025.
* Arbor Renewable Gas is looking at Port Allen for an $800 million facility that would produce renewable gasoline and “green" hydrogen from wood waste and forest residue. Though initial estimates said ARG could start construction in 2023, the company has yet to announce a final investment decision on development.
* The Bayou Fuels project in Natchez, Miss., will take waste woody biomass and convert it into SAF and naphtha using Velocys’ proprietary micro-channel FT reactors. The project will incorporate carbon capture and storage to enable the commercial-scale production of SAF with an extremely negative carbon intensity.
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