Jets soar through the skies above vast expanses of corn in the heartland of the United States. With the growing pressure on airlines to reduce emissions, a unique alliance has emerged between airlines and farmers, as they join forces to advocate for the use of corn as a sustainable aviation fuel. However, environmental groups have raised concerns about the environmental impact of refining corn into biofuels. The fate of corn ethanol as a sustainable aviation fuel may soon be determined by new tax regulations set to be released in the coming month.
Airlines have made commitments to achieve net zero emissions by 2050, but this goal heavily relies on the availability of sustainable aviation fuel, which is currently in limited supply and primarily made from cooking oil or animal fats. The biofuels industry in the US, the largest in the world, was boosted by a 2007 law that mandated the blending of increasing amounts of ethanol into gasoline. However, the industry now faces declining demand as electric cars become more prevalent on American roads.
In the pursuit of a viable product and market, airlines and biofuel refiners are joining forces to incorporate ethanol into the fuel mix for planes. Their lobbying efforts focus on securing tax credits for aviation fuel under the Inflation Reduction Act, a groundbreaking climate law signed by President Joe Biden a year ago. These tax credits are valued at $1.25 per gallon for fuels that reduce emissions by at least 50% compared to traditional jet fuel, with the potential to increase to $1.75 per gallon for even greater reductions.
Major carriers like United Airlines and Alaska Airlines have allied themselves with farm groups, US biofuel refinery owners such as Archer Daniels Midland and Green Plains, and international oil companies like BP and Shell to urge federal tax officials to adopt an analysis of greenhouse gas emissions that would qualify ethanol for more generous tax credits. The International Air Transport Association estimates that airlines worldwide will need 119 billion gallons of sustainable fuel annually to achieve their carbon goals by mid-century, but refiners produced only about 300 million gallons last year.
Tom Michels, the director for government affairs at United Airlines, emphasizes the industry’s desire to create incentives for the production of more sustainable fuel. He argues that utilizing the biofuels currently available on the market will bring about quicker emission reductions compared to waiting for advanced fuels that are not yet commercially viable. Michels poses the question: Are these fuels a better option than traditional oil-based fuels?
The alliance of airlines, refiners, and farmers favors an emissions analysis known as Greet, developed by the federal Argonne National Laboratory. The Inflation Reduction Act already designates Greet as the standard for measuring emissions for renewable diesel, another type of biofuel. However, environmentalists advocate for the adoption of a different standard known as Corsia, established by the UN’s aviation governing body. Corsia applies stricter penalties for land use changes associated with crop planting, such as deforestation. Consequently, ethanol’s overall emissions appear higher under the Corsia model.
Critics argue that promoting incentives for ethanol could discourage the development of less carbon-intensive alternatives. They worry that if a cheaper and readily available fuel like ethanol receives tax credits, refiners may be deterred from investing in the research and development of new fuels. Lucca Ewbank, an aviation analyst at InfluenceMap, warns that ethanol gives the illusion of climate action for airlines while delivering fewer emissions reductions compared to newer sustainable fuels.
The Biden administration is divided over which emissions analysis model to support, with White House senior climate adviser John Podesta tasked with resolving the disagreement. The biofuel industry, backed by farmers, wields significant influence in Washington. Numerous legislation supporting the Greet standard has been introduced in Congress, leading Democrats and Republicans from states like Illinois and Nebraska to collaborate. However, the power of the agricultural industry could potentially dilute any regulations promoting lower carbon intensity standards.
By convincing the US government to extend tax credits to ethanol, even if it offers fewer emissions reductions than alternatives, airlines could significantly expand the supply of what qualifies as sustainable aviation fuel and potentially lower costs. Sustainable aviation fuel currently costs $7.98 per gallon, over two and a half times the price of Jet A, the standard petroleum-based fuel in the industry. Airlines are reluctant to adopt a product that would increase their costs in comparison to competitors, while refiners hesitate to invest in research or new facilities without guaranteed customers.
Ethanol currently sells for $2.18 per gallon, but it requires additional processing for aircraft use. Ethanol-to-jet fuel is a small and emerging sector within the already nascent sustainable aviation fuel industry. Consequently, the potential market for ethanol producers in aviation is significant, according to Geoff Cooper, CEO of the Renewable Fuels Association. However, if tax officials favor the emissions analysis favored by environmentalists, biofuels will likely be directed towards renewable diesel and trucking, effectively eliminating ethanol as a viable sustainable aviation fuel in the near future.
The issue of land use changes may seem abstract, but a study conducted by scientists at the University of Wisconsin-Madison revealed that the Renewable Fuel Standard implemented by the 2007 law led to an increase of 5.2 million acres of US cropland, resulting in carbon emissions comparable to those of gasoline. The study’s findings were vigorously debated, with the Renewable Fuels Association dismissing them as discredited. However, the impact of land use changes on the environment, even if seemingly small, cannot be overlooked.
In conclusion, the aviation industry’s collaboration with farmers and biofuel refiners in promoting ethanol as a sustainable aviation fuel has encountered resistance from environmental groups. The outcome hinges on upcoming tax regulations and the adoption of emissions analysis models. While ethanol may offer immediate reductions in emissions, critics argue that it may hinder the development of more advanced and eco-friendly alternatives. The US government’s decision will have significant implications for the airline industry, the biofuels sector, and the future of sustainable aviation fuel.
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