US issue partial guidance on clean-fuel subsidies, which chastises ethanol producers
The U.S. Government released on Friday short-term guidelines on how companies could secure clean fuel tax credit under the Inflation Reduction Act. However, it did not finalize the key details of the program.
The biofuels industry is eager to get clarity about the tax credits that are available for fuels which combat climate change. They hope this will allow corn-based fuel ethanol to be used as a feedstock in sustainable aviation fuel. The U.S. Treasury Department released the guidance. It said it provided new details on the criteria fuels must meet to qualify for the subsidy.
Wally Adeyemo, Deputy Secretary of Treasury, said: "This guidance will put America at the forefront of future innovation and in renewable fuels while also lowering the transportation costs for the consumers."
"Decarbonizing transport and lowering costs are a win-win situation for America." Biofuels groups, however, were less enthusiastic. They said that the guidelines left many final decisions up to Donald Trump's presidency.
Emily Skor, CEO of Growth Energy said that the long-overdue guide is still lacking critical details. "This guidance will not be complete until it includes the necessary details to ensure that American biofuels producers and their farming partners can continue to lead the world with clean fuel production," she added. The administration is expected to release its climate model for the program next week. However, it won't include any adjustments to the so-called climate-smart agriculture practices like no-till farms that the ethanol sector hoped to use to meet the lifecycle emission requirements.
Skor stated that "while we appreciate Secretary Tom Vilsack's efforts to advocate our issues for rural America, the announcement today falls short in providing the information our industry and farm partners need. This includes a model of an expanded list of eligible decarbonization techniques and guidance on Climate Smart Agriculture (CSA) practices."
She said, "We are looking forward to working with next administration to fill the gaps created by today's announcement."
Trump has pledged to repeal Biden’s 2022 Inflation Reduction Act which launched the program to pay for an extension of his tax cut, but this would require the support of Congress.
Biden's Administration set the goal of producing 3 billion gallons (or a sustainable aviation fuel) by 2030.
The air travel industry contributes about 2.5% to global greenhouse gas emission, which makes it an important target in the fight against Climate Change. (Reporting and writing by Stephanie Kelly, New York; Editing by Matthew Lewis).
(source: Reuters)
