By Scout Nelson
The shift from fossil fuels to electric vehicles creates uncertainty for ethanol’s future. However, sustainable aviation fuel (SAF) may emerge as a significant demand driver for ethanol and agriculture in Nebraska. SAF, a renewable alternative to petroleum jet fuel, can be produced using ethanol and oils derived from corn and soybean processing.
Two key developments have spurred interest in SAF. Airlines are targeting carbon neutrality by 2050, with many already incorporating SAF into operations. Additionally, the Inflation Reduction Act of 2021 introduced a tax credit for SAF reducing greenhouse gas (GHG) emissions by at least 50%, making it more competitive.
Recognizing this potential, Nebraska passed legislation in 2023 to support SAF production. The SAF provisions, introduced as LB 1072 and included in LB 937, offer tax credits starting in 2027.
Producers can earn 75 cents per gallon for SAF reducing GHG emissions by 50%, with additional credits for further reductions. These incentives, capped at $500,000 annually, are the first of their kind in the Midwest.
Dawn Caldwell with Renewable Fuels Nebraska noted that airlines spent over $756 million on SAF in 2023, a figure expected to grow significantly. However, Nebraska faces competition from countries like Brazil, where sugar cane-based ethanol has lower carbon intensity, making it attractive for SAF production.
While challenges remain, SAF could play a crucial role in shaping the future of ethanol and renewable fuels. If Nebraska producers secure a share of this growing market, it could bolster the state’s ethanol industry and support sustainable agriculture practices. SAF’s potential to fuel air travel while reducing emissions highlights its importance in a rapidly evolving energy landscape.
Photo Credit:gettyimages-kn1
Categories: Nebraska, Crops, Corn, Soybeans, Energy, Government & Policy