America’s corn and soybean farmers are on the precipice of a whole new market for their commodities. If Congress comes through, farmers will be helping fuel the airplanes that crisscross the world’s skies by providing the feedstocks for sustainable aviation fuels.
U.S. companies are already investing in the expensive process of turning corn and soybeans into sustainable aviation fuel, or SAF. The Biden administration says it wants to see a lot more of the finished product, but there’s still plenty of uncertainty as lawmakers debate whether or not ag-based fuels will be eligible for new tax credits.
It’s unclear just how much demand for corn and soybeans would be if ag-based ethanol, isobutanol and renewable diesel became core feedstocks for jet fuel, but it could be significant based on estimates from one company.
Colorado-based Gevo is building a comprehensive ag-based fuel operation in South Dakota that is expected to purchase 30 million bushels of corn to produce 340 million pounds of high-protein animal feed, 30 million pounds of corn oil and 46 million gallons of jet fuel every year, according to CEO Patrick Gruber.
“We want to maximize all coproducts,” said Gruber, who predicted that the facility will come online in 2024 and primarily make SAF from corn-based isobutanol. Gevo is already making the corn-based fuel in a 10-year-old Minnesota plant and sending it to a facility in Texas to be further processed into jet fuel.
“It definitely has the potential to have a big impact on corn farmers and corn-based ethanol,” says Jim Bauman, vice president for marketing and development of the National Corn Growers Association. “There’s a lot of excitement about the potential, but we’re not producing mass quantities today by any means.”
Jim Bauman, NCGA
That could change very soon — both for corn- and soy-based SAF.
“You could see this build up quickly,” said Baumann about a quick rush to turn ethanol and isobutanol into SAF.
Paul Winters, a spokesman for the National Biodiesel Board, agreed about the prospects when it comes to soy-based jet fuel.
“There’s a growing number of renewable diesel producers … and they all could be updated to produce SAF,” he said.
It’s why the NBB was one of the nine groups that signed on to a letter to House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer, demanding Congress not exclude ag-based jet fuels from a new tax incentive in the $3.5 trillion budget reconciliation bill.
“Numerous members of our respective organizations are poised to produce SAF or sustainable feedstocks for SAF,” the groups said in the letter. “Many others are working toward participation in the full value chain in the relatively near future. Because biomass feedstocks are essential SAF sources, it is imperative that tax credits and other programs properly account for the lifecycle emissions of these sources and the petroleum products these new fuels will replace.”
The core of the issue is how the federal government would calculate the carbon footprint of SAF and that the calculation — as it stands now in three portions of the reconciliation bill — would effectively prohibit SAF producers from a new tax credit that ranges from $1.25 to $1.75 per gallon if the fuel is made from corn or soybeans.
The methodology to evaluate lifecycle emissions of SAF in the bill was designed by the Canada-based International Civil Aviation Organization and would effectively rule out ag-based fuels. Jet fuel derived from ethanol or renewable diesel would effectively score the same carbon index score as petroleum-based jet fuel under the ICAO model.
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Not so under the model created by the Argonne National Laboratory and used extensively by the Department of Energy. Ag-based SAF scores a much lower carbon rating under the Greenhouse gases, Regulated Emissions, and Energy Use in Technologies — or GREET — model.
“If carbon intensity modeling doesn’t reflect accurate crop production practices, the opportunity for row crops as a feedstock diminishes dramatically,” said Bauman.
The ag sector is pushing to get the ICAO model replaced with the GREET model, and negotiations are going on in Capitol Hill to do exactly that, says Growth Energy Vice President of Government Affairs John Fuher.
John Fuher, Growth Energy
He says ag-based SAF producers can qualify for the biodiesel blenders credit, but that won’t be enough to incentivize large-scale volumes.
There are major cost increases to scale up to SAF from ethanol or renewable diesel production, says Fuher, and if the federal government wants to spur large-scale production, it’s going to need to make sure that producers can count on the tax credit for years to come.
“You’re essentially paying to remove carbon from jet fuel,” he said, stressing that the ag sector can do that efficiently.
And Gruber says that a model that counts agriculture will create market pressure on farmers to improve the sustainability of their operations. SAF operations that need to keep low carbon index scores will choose to source their corn from farms with the greenest operations.
“Suppose we do count agriculture properly, then it matters where ethanol gets its corn,” Gruber said. “It will force the agriculture systems to improve because the choice will be made for the corn that comes with a lower footprint … Not all corn is equal.”
Grevo, which is planning to make its South Dakota plant a net-zero operation with windmills and other sources of renewable energy to power it, will also be measuring the carbon sequestration efforts in all of the fields where it buys corn from, said Gruber.
A previous version of this story reported Gevo's plans to purchase 30 billion bushels of corn. The company plans to purchase 30 million bushels.
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