Biofuel, Transportation Companies Ask Congress To Exclude Co-Processed Petroleum from Sustainable Aviation Fuel Credit

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by | Dec 10, 2021

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Four companies involved in the biofuels industry published an open letter Thursday urging Congress to exclude co-processed petroleum from sustainable aviation fuel credits.

Sustainable aviation fuel is a low-carbon jet fuel made from renewable biomass and waste resources, including corn, algae, waste oils, agricultural and forestry residues, and solid + liquid waste streams. In addition to reducing greenhouse gas emissions, SAF can create new economic opportunities in farming communities and boost aircraft performance.

Biomass can be co-processed with petroleum at oil refineries to produce SAF. This type of fuel is already excluded from eligibility for the biodiesel and renewable diesel blenders’ tax credit, as it does not generate the same economic, environmental and societal benefits. In the language of the letter, “Considerable data suggests co-processing biomass at a refinery does not generate an equivalent amount of renewable fuel – much of the renewable content and associated greenhouse gas savings are lost in the process.”

The signatories, which include Growth Energy, National Biodiesel Board, NATSO, representing America’s travel plazas and truckstops, and SIGMA: America’s Leading Fuel Marketers, reasoned that if US oil refiners are incentivized to co-process biomass feedstock, they could potentially divert available biomass feedstock from standalone biofuel producers, minimizing the environmental benefits. Furthermore, rewarding oil refiners could undercut the economics of building of new biofuel facilities, disincentivizing production.

Specifically, the group is requesting language in the Biden administration’s Build Back Better legislation that all transportation fuels made by co-processing biomass with non-biomass feedstocks are ineligible for financial incentives. It also asked Congress to clarify which SAFs are eligible for tax credits to provide more certainty to the industry.

The SAF sector has been dynamic and innovative as of late. In September, Chevron committed to investing in an SAF processing facility. In October, Delta airlines purchased more than $1 billion worth of SAF. Later that month, carbon transformation technology company Twelve revealed that it had produced the first fossil-free SAF, capturing carbon dioxide from an emissions source and electrolyzing it using water and renewably generated electricity. In November, Deutsche DSL announced it would purchase 60 million euros worth of SAF to avoid an estimated 70,000 tons of greenhouse gas emissions. And in the beginning of December, United completed the first commercial flight using 100% SAF. 

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