Biden administration to delay aviation fuel subsidy guidance until December, sources say - Reuters

Biden administration to delay aviation fuel subsidy guidance until December, sources say | Reuters

Biden administration to delay aviation fuel subsidy guidance until December, sources say

John Podesta, the White House senior advisor for clean energy, delivers a speech during the CERAWeek energy conference in Houston, Texas, U.S., March 6, 2023. REUTERS/Callaghan O'Hare/File Photo Acquire Licensing Rights

NEW YORK, Sept 6 (Reuters) - President Joe Biden's administration likely will delay until December a decision on whether to make it easier for sustainable aviation fuel made from corn-based ethanol to qualify for subsidies under the White House's signature climate law, two sources familiar with the discussions said on Wednesday.

The administration has been divided over the issue, which has prompted a fierce lobbying push from U.S. Farm Belt stakeholders that see sustainable aviation fuel (SAF) as crucial for the ethanol market's growth. Environmental groups, on the other hand, say clearing land to grow crops for fuel is counterproductive to curbing global warming.

The White House did not immediately respond to a request for comment.

John Podesta, a senior White House adviser on clean energy, has been tasked with resolving the issue, Reuters reported in August. At the time, a White House official told Reuters that the administration's SAF policy seeks to include ethanol, but "we are trying to seek alignment with stakeholders on the question of modeling."

At issue is a requirement in last year's Inflation Reduction Act (IRA) that SAF producers seeking tax credits must demonstrate with an approved scientific model that their fuel generates 50% less greenhouse gas emissions over its lifecycle than petroleum fuel.

Midwest ethanol producers have asked the administration to adopt a model that would enable ethanol-based SAF to qualify while environmentalists want standards that would favor inputs like used cooking oil and animal fat.

The administration's decision will determine who benefits from billions of dollars in subsidies expected under the program. It was expected to announce a decision by September.

Reporting by Stephanie Kelly and Jarrett Renshaw; editing by Timothy Gardner

Our Standards: The Thomson Reuters Trust Principles.

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