Airlines Push Jet Fuel Subsidies to Help Corn Growers

United Airlines announced in May it’s on track to use 10 million gallons of sustainable aviation fuel in 2023, which is 10 times more than it consumed in 2019. Multiple airlines are showing their interest in SAF for climate reasons and to keep corn growers relevant in the rise of electric vehicles. But environmental activists are pushing back, causing a divide in the White House.

Under the Inflation Reduction Act, the Biden administration is targeting at least 3 billion gallons (11.4 billion liters) of sustainable aviation fuel (SAF) production per year in the U.S. by 2030 as part of its broader push to fight climate change.

“These tax credits, which encourage the use of more eco-friendly fuels, could make or break the prospects of corn ethanol as a sustainable aviation fuel. Airlines, biofuel refiners and oil companies are lobbying for more generous tax credits for ethanol-based fuels that reduce emissions,” says Jim Wiesemeyer, ProFarmer policy analyst.

Ethanol proponents and climate activists disagree over how to measure emission reductions and, therefore, credits. 

The ethanol industry is asking the administration to use a methodology to calculate emissions developed by the Department of Energy called GREET that  shows ethanol has a lighter carbon footprint as a SAF than when compared to the methodology proscribed by IRA. The method outlined in the IRA was developed by the International Civil Aviation Organization.

Environmentalists, on the other hand, advocate for the Corsia standard, which penalizes fuels more for changes in land use linked to crop planting. Critics argue that supporting ethanol could hinder investments in advanced, less carbon-intensive alternatives to SAF. They say ethanol would increase reliance on older, less efficient fuels.

Wiesemeyer says the White House is divided in which model—GREET or Corsia—to use.

“If tax credits are extended to ethanol, despite its lower emissions reduction compared to alternatives, it could significantly expand the supply of sustainable aviation fuel, making it more accessible and affordable for airlines. This move could help airlines meet emissions targets while avoiding higher costs that come with investing in newer, more expensive sustainable fuels,” says Wiesemeyer.