(Reuters) – The U.S. government released short-term guidance on Friday on how companies can obtain clean fuel tax credits under the Inflation Reduction Act, but failed to finalize key details of the program.
Biofuel groups are eager for clarity on tax credits for fuels that fight climate change, which they hope will ultimately provide a path for corn-based ethanol to expand its market as a feedstock for sustainable jet fuel.
The U.S. Treasury Department issued the guidance, saying it provides new details on how to ensure fuels meet certain emissions reduction criteria to access the subsidy, adding that a crucial climate model the program relies on will be released in the coming days will be available.
“This guidance will help position America as a leader in future innovation in aviation and renewable fuels, while also lowering transportation costs for consumers,” said Treasury Department Deputy Secretary Wally Adeyemo.
“Decarbonizing transportation and lowering costs is a win-win for America.”
Biofuels groups were less enthusiastic, saying the guidelines left several final decisions up to the administration of newly elected President Donald Trump.
“This long-awaited guidance is far from complete; “We are still missing the critical details needed to ensure that U.S. biofuel producers and their agricultural partners can lead the world in clean fuel production,” said Emily Skor, CEO of Growth Energy.
Reuters reported earlier on Friday that the government plans to release the program’s climate model next week, but that it will not include adjustments for so-called climate-smart agricultural practices – such as no-till farming – that the ethanol industry hoped it could use to meet climate change. emission requirements during the life cycle.
“While we appreciate the work of U.S. Secretary of Agriculture (Tom) Vilsack to advocate for our issues on behalf of rural America, today’s announcement falls short of providing the information our industry and its farming partners need, including a model for an increased range of eligible decarbonization technologies and guidance on climate-smart agricultural practices (CSA),” Skor said.
“We look forward to working with the next administration to fill the gaps left by today’s announcement,” she said.
Trump has vowed to repeal Biden’s 2022 Inflation Reduction Act, which launched the program, to pay for the extension of his tax cuts, but that would require support from Congress.
The Biden administration has set a goal of producing 3 billion gallons of sustainable aviation fuel by 2030.
Air travel is responsible for about 2.5% of global greenhouse gas emissions, making it a key target in the fight against climate change.
