US Treasury Issues Partial Guidance on Clean Fuel Subsidies, Leaving Key Decisions Unresolved

Biofuel producers express frustration as the Biden administration's interim guidance excludes climate-smart farming practices and defers critical updates to the incoming Trump administration.

• The U.S. Treasury released short-term guidance on clean fuel tax credits under the Inflation Reduction Act but withheld final details of the program.
• The guidance excludes climate-smart agricultural practices, disappointing ethanol producers who hoped to use these to meet emissions criteria for subsidies.
• A new climate model critical to determining subsidy eligibility is expected next week but will limit credits for ethanol and imported used cooking oil as feedstocks for sustainable aviation fuel (SAF).
• Biofuel industry leaders criticized the lack of clarity and expressed concerns over delayed investment plans, as major program decisions are deferred to the Trump administration.
• Biden's administration previously set a target of producing 3 billion gallons of SAF by 2030 to reduce aviation emissions, which account for 2.5% of global greenhouse gases.

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The Globe and Mail