Kansas Corn Growers Face Challenges in Sustainable Aviation Fuel Market Due to New Tax Credit Regulations

By Trish Svoboda

The Kansas Corn Growers Association (KCGA) is concerned by the recent announcement from the U.S. Department of Treasury regarding eligibility for sustainable aviation fuel (SAF) tax credits. Initially hopeful about providing corn-based ethanol to help decarbonize the aviation industry, corn growers are now facing limitations due to the announcement, impacting their ability to benefit from tax credits under the Inflation Reduction Act (IRA).

The IRA mandates a 50 percent reduction in greenhouse gas (GHG) emissions, but the Department of Energy’s update to the Argonne GREET model has improperly lowered corn’s land use scores, making it more challenging for farmers to meet the requirements. Under the new guidance, corn farmers must implement three on-farm conservation practices—cover cropping, minimized tillage, and enhanced efficiency nitrogen fertilizer application—to qualify for tax credits.

These strict regulations are expected to hinder Kansas farmers’ participation in the potential 35-billion-gallon ethanol market, creating inequalities among farmers based on their location, according to KCGA leaders. The current guidance for the 45Z clean fuel production tax credit will remain until the end of the year, with efforts to establish more permanent regulations underway.

KCGA is actively advocating for corn growers’ interests in the upcoming 45Z rule and aims to protect farmers’ autonomy while promoting sustainable aviation fuel opportunities. Kansas Corn is collaborating with aviation companies and ethanol plants to develop sustainable aviation fuel from corn-based ethanol.

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