One year in, the Inflation Reduction Act shows great promise for ethanol

Wednesday marked the anniversary of the signing of the Inflation Reduction Act (IRA). According to the latest from BloombergNEF, President Biden’s signature climate bill could result in a 40 percent drop in energy-related emissions by 2035 and 55 percent by 2050, compared to 2021. Of course, the actual pace of any progress will be determined by a wide range of factors, including some important decisions yet to be made by the U.

S. Treasury Department. Fundamentally, the IRA is a financial package that phases in a host of new incentives designed to spur investment in everything from carbon capture to sustainable aviation fuel.

Each tax credit and spending provision has to be rolled out with different rules and regulations. If and how clean energy innovators can deliver on IRA’s goals will depend on whether or not investors can actually access the new incentives. America’s biofuel sector, of which I am a part as CEO of Growth Energy, is no exception.

We were thrilled to see Congress approve tax incentives for sustainable aviation fuel and clean fuel production while also expanding tax incentives for carbon capture — all areas where biofuel producers are leading efforts to cut carbon emissions, reduce our reliance on foreign oil, save drivers money at the pump and create new American jobs. We also celebrated the leadership of Agriculture Secretary Tom Vilsack, who $500 million in new funds for biofuel blending infrastructure this June. Those grants will help our retail partners to expand options at the pump, so that more American drivers can save money and reduce their carbon emissions.

Moving forward, we hope to see Treasury match the USDA’s pace with smartly implemented tax incentives that will allow ethanol producers to accelerate the nation’s progress toward a net-zero environment. The path is clear, but challenges remain. Despite , support, a handful of groups have urged Treasury to block American agriculture from accessing sustainable aviation fuel incentives by weaponizing inaccurate and outdated assumptions about U.

S. agriculture — meaning American farmers would be locked out of a new market for green energy. Their goal is to stop the Internal Revenue Service from measuring the carbon intensity of sustainable aviation fuel based on a widely accepted and continuously updated model built by the Department of Energy’s Argonne National Laboratory.

The gold standard for climate science, it’s called the (GREET) model. If successful, such efforts to sideline GREET would doom any serious effort to scale up sustainable aviation fuel. As Biden , “Mark my words: the next 20 years, farmers are going to be providing 95 percent of all the sustainable airline fuel.

” Worse, if the IRS declines to adopt GREET, it might signal to climate-smart agricultural investors that regulators can’t be counted on to follow the science when it comes to other credits, like the slated to take effect in 2025. That’s the kind of uncertainty that can kill green projects before they ever get off the drawing board. Fortunately, Congress pointed Treasury in the right direction.

In fact, several provisions of the IRA specifically require the use of GREET to calculate the benefits of non-aviation transportation fuels and clean hydrogen. Lawmakers on of the aisle to make sure a consistent approach is available for SAF. American biofuel producers are more than ready to do our part.

And by following the best available science, Treasury can ensure that year two of the IRA represents a true turning point in America’s energy transition, just as Biden envisioned. .