In his testimony, Werner said the 40B Sustainable Aviation Fuel (SAF) tax credit guidance released in April was a step in the right direction but additional flexibility for farmers and biofuel producers was needed in the upcoming 45Z guidance, in part by "unbundling" climate smart agriculture (CSA) practice requirements and including a broader array of conservation practices and industrial decarbonization technologies.
"We also recommend that CSA attributes be 'decoupled' fromt the physical bushels of grain, as in a 'book-and-claim' accounting system. This approach would provide flexibility for biofuel producers and avoid disruptions in grain flows, grain marketing inefficienciesm and prevent increased transportation emissions," he said.
Read his full testimony below:
My name is Brian Werner, and I am the Executive Director of the Minnesota Bio-Fuels Association. On behalf of our nine producer members across the state of Minnesota, we appreciate the opportunity to provide testimony during this public consultation.
We thank USDA for its ongoing interagency work with the U.S. Treasury Department, among other federal agencies, to implement the clean fuel production tax credits enacted in the Inflation Reduction Act (IRA).
The 40B SAF tax credit guidance released in April, was a step in the right direction. We strongly support allowing Argonne GREET to serve as a qualifying lifecycle model, and we appreciate that the modified GREET for 40B allows farming practices to contribute to carbon intensity (CI) reductions.
However, moving forward, as detailed in our comment letter, we urge you to provide additional flexibility for farmers and biofuel producers in the upcoming 45Z guidance, in part by “unbundling” CSA practice requirements and including a broader array of conservation practices and industrial decarbonization technologies into the models.
We also recommend that CSA attributes be “decoupled” from the physical bushels of grain, as in a “book-and-claim” accounting system. This approach would provide flexibility for biofuel producers and avoid disruptions in grain flows, grain marketing inefficiencies, and prevent increased transportation emissions.
Additionally, the scientific consensus on the impact of land use changes from biofuel production has benefitted from improved research methods and better cropland data classification systems. A more robust body of peer-reviewed research has helped to confirm that biofuels reduce GHG emissions. When quantifying the GHG emissions outcomes related to both CSA and conventional farming practices, USDA should rely on the predominant scientific consensus on direct and indirect land use change that show the overwhelming GHG emissions benefits of biofuels.
Lastly, the 40B SAF guidance was significantly delayed and released nearly a year-and-a-half after the tax credit went into effect. Ethanol producers cannot make forward-looking business decisions and investments when facing regulatory uncertainty. The 45Z tax credit guidance must be finalized by January 1, 2025, or the congressional intent of the credit to increase low-carbon domestic renewable fuels and further decarbonize existing biofuel production will be undermined.
Again, thank you for the opportunity to comment on this important issue.
Read our comments to the USDA on Climart Smart Requirements here.