Source Link: https://www.greenbiz.com/article/future-sustainable-aviation-fuel-depends-2023-farm-bill
Sustainable aviation fuel (SAF) is a green alternative to highly polluting petroleum jet fuel. It’s made from renewable biomass and waste resources and, according to the Department of Energy, releases a fraction of the greenhouse gases associated with current jet fuel options. SAF is even touted as the aviation industry’s bridge from its current fossil fuel-reliant structure to a future consisting of electric engines and hydrogen-powered commercial aircraft.
And yet SAF is struggling to reach commercial viability. Even though aviation contributes a total of 2.5 percent of GHG emissions annually, SAF comprised less than 0.2 percent of total jet fuel used in 2022.
“The biggest problem for SAF right now is high cost, low production,” said John Hebert, senior policy adviser for transportation at Third Way. “A commercial scale [SAF] facility might cost billions of dollars, [while] a demonstration or pilot scale facility might still cost into the hundreds of millions.”
To ease that strain, recent legislation such as the Inflation Reduction Act (IRA) introduced incentives aimed at luring investor interest. The Sustainable Aviation Fuel Tax Credit (SAFTC) provides companies $1.25 per gallon for fuels that reduce emissions at least 50 percent compared to jet fuel, and up to $0.50/gallon for even further reductions.
The Alternative Fuel and Low-Emission Aviation Technology (AFLEAT) grant is dedicated to scaling up domestic SAF production. The IRA allocates $297 million over five years to the program, funding projects related to production, transportation or storage of SAF.
Referring to the SAFTC and AFLEAT, Hebert said, “Those are critical stepping stones [to SAF commercialization] now. They’re not sufficient on their own.” This is where the 2023 Farm Bill comes in.
What you need to know about the Farm Bill
Last passed in 2018 with $428 billion in funding, the Farm Bill — rewritten and passed every five years — contains hundreds of billions of dollars dedicated to programs covering crop insurance, wildlife conservation programs, sustainable agricultural practices and energy funding.
While on its face the Farm Bill is focused on agriculture and land management, the legislation has far-reaching impacts on corporate America. Commodities supporting farmers and other distributors ultimately affect the beverage and manufacturing corporations dependent upon their output. Companies working to innovate monitoring, evaluating and learning technologies connected to soil, land and conservation data rely upon Farm Bill-specific funds.
The official budget for the 2023 Farm Bill is still unknown, as the ratification for the legislation has been delayed indefinitely.
SAF’s potential within the Farm Bill
A delay in the passage of the 2023 Farm Bill means funding allocations are not yet set in stone — specifically, the money designated for the energy title. Title IX, or the energy title, addresses the production of bioenergy.
“The energy title is maybe half of 1 percent of all farm bill spending,” Hebert explains. And in all previous versions of the Farm Bill, anything remotely related to SAF has fallen into that “very, very small piece,” if indeed mentioned at all.
“Sustainable aviation fuel specifically was not really a callout in terms of terminology in the 2018 Farm Bill,” said Lesley Jantarasami, managing director of the energy program at the Bipartisan Policy Center. “It was not really on people’s radars.”
But now legislators’ radar screens are blinking with SAF. In August, Rep. Jasmine Crockett (D-Texas) introduced H.R. 5235, or the Farm to Fuselage Act, to the House floor.
H.R. 5235 is an express call to include SAF in the 2023 Farm Bill. Specifically, it requests that the Farm Bill “assist in paying the costs of the development and construction of demonstration-scale biorefineries to demonstrate commercial viability,” a sentiment that echoes Hebert’s reasoning for SAF’s slow market penetration.
Within the Farm Bill itself, the Section 9003 Loan Guarantee Program assists in the development of advanced biofuels, renewable chemicals and biobased products. The influx of federal funds — $250 million — minimizes the financial risk associated with the development of SAF production facilities, “making it a lot more attractive for the private sector,” according to Hebert.
The delay of the 2023 Farm Bill means the legislature has more time to ensure the inclusion and prioritization of SAF and a sustainable aviation industry. Policy on its own is rarely enough to overhaul an entire marketplace, requiring direct buy-in from influential stakeholders.
While Delta Air Lines was unavailable for an interview, its sustainability office sent over a statement that directly addressed this, saying, “We need everyone at the table, working together to advance policies that will support the commercialization of a strong domestic SAF industry in the United States.”
