EPA establishes ag, rural office but SAF tax credit delayed

HOUSTON — Environmental Protection Agency Administrator Michael Regan recently announced the establishment of the EPA Office of Agriculture and Rural Affairs, but he and Agriculture Secretary Tom Vilsack were also forced to announce that the Biden administration has delayed the release of its carbon modeling updates for the Sustainable Aviation Fuel tax credit, which had been scheduled for today.

Regan and Vilsack made the announcements at the Commodity Classic, a gathering here of 11,500 people including farmers and their families sponsored by the corn, soybean, wheat and sorghum commodity groups and the Association of Equipment Manufacturers.

EPA is in charge of a number of policies and programs that affect farmers, including the Renewable Fuel Standard, a national policy that requires a certain volume of renewable fuel to replace or reduce the quantity of petroleum-based transportation fuel, heating oil or jet fuel; the Clean Water Act; and the Clean Air Act and pesticide regulation.

EPA’s relationship with farmers has been contentious since the agency was established in 1970 to clean up the nation’s air and water.

“Farmers and ranchers are crucial partners as we work together to deliver clean air, clear water, and climate solutions, all while playing the critical role of ensuring an abundant fiber, fuel and food supply,” Regan said. “With the launch of this new office, we are ensuring agricultural and rural stakeholders will continue to have a seat at the table for many years to come.”

The director of the office will be Rod Snyder, who has served as Regan’s senior adviser on agriculture since October 2021.

EPA said in a news release, “The new office will expand on the work of the ag adviser and increase coordination with a network of existing agriculture policy advisors located in all 10 EPA regional offices across the country.”

“In close coordination with EPA’s program offices and regions, the office will forge practical, science-based solutions that protect the environment while ensuring a vibrant and productive agricultural system,” EPA said.

“In support of the Biden-Harris administration’s Rural Partners Network, the new office will also collaborate with small, underserved towns and rural communities that are seeking federal investments in infrastructure upgrades and other community improvement opportunities.

“Additionally, the new office will facilitate closer coordination with relevant federal and state partners such as the U.S. Department of Agriculture, U.S. Food and Drug Administration, and state departments of agriculture. The office will also house EPA’s existing Farm, Ranch and Rural Communities Federal Advisory Committee.”

Snyder previously worked as a lobbyist for the National Corn Growers Association, one of the sponsors of the Commodity Classic.

NCGA President Harold Wolle said in a news release today, “We are exceptionally pleased that there will be a program at EPA that is tasked with ensuring the voices and concerns of farmers are heard loud and clear.”

“And the administrator could not have found a better person to lead this office than Rod Snyder. Anyone who has worked with Rod will tell you he is a smart, stellar professional who thoroughly understands the agricultural community.”

In their speeches, Regan and Vilsack talked about the many programs that each of their agencies run. Snyder pointed out that he had released volumetric requirements for biofuels under the Renewable Fuel Standard for a three-year period, which he said should give the industry stability.

Regan also announced recently that EPA will approve the sale of E-15 ethanol on a year-round basis in Midwestern states in 2025. At a news conference, he said EPA would go through the same process as in recent years to consider waivers for the sale of E-15 in the summer months in 2024.

But Regan and Vilsack also had to announce to the farmers that the Biden-Harris administration was not ready to release the model for the Sustainable Aviation Fuel tax credit, which the administration had promised in December would be released by March 1.

Vilsack said that the Treasury Department, the agency that will determine what fuels are eligible for the tax credit, needs more data to determine which fuels will have a minimum reduction of 50% in lifecycle greenhouse gas emissions, which will qualify them for the tax credit that was included in the Inflation Reduction Act.

He pointed out that he had insisted in Inter-Agency Working Group meetings that the evaluation of the fuels include the Energy Department’s GREET (Greenhouse gases, Regulated Emissions, and Energy use in Technologies) life cycle analysis of energy, emissions and environmental impact, which the ethanol industry believes would treat it fairly. 

Vilsack said he believes the model for the tax credit will be released “within weeks,” but Renewable Fuels Association President Geoff Cooper said he is still uncertain how long it will take for the tax credit to be so clear that investors will be comfortable making commitments to develop sustainable aviation fuel, for transportation systems to be put in place, and for airlines to buy it.

“While we are pleased to hear progress is being made on the modified GREET model, we are disappointed by this additional delay,” Cooper said in a news release.

“RFA is calling on the Interagency Working Group to complete this process as expeditiously as possible, while maintaining scientific integrity and honoring the commitment to incorporate a broad range of carbon reduction strategies. To meet the Biden administration’s SAF goals, the marketplace needs certainty and clarity. Investment and innovation in SAF technologies will remain frozen until the model is finalized and additional guidance is issued.”

Cooper added, “Getting the modeling right could open the door for America’s farmers and ethanol producers to participate in an enormous decarbonization opportunity. But getting it wrong will strand investments and assure the failure of the Biden administration’s climate objectives.”

Emily Skor, CEO of Growth Energy, which represents companies that build ethanol plants and run them, said, “The administration made a clear commitment to finalize this guidance no later than March 1. This delay is frustrating, but we’re optimistic that it’s happening for a productive reason.”

“Ultimately, what’s most important is getting it right, and making sure that the resulting updates provide real opportunities for American farmers to contribute to the SAF market,” Skor said.

“Officials should follow the science behind Argonne-GREET, the most accurate model and the only one that accounts for all of the climate-smart innovations happening on farms across America’s heartland. American bioethanol producers must be allowed to compete in the SAF marketplace. The alternative is making SAF from Brazilian sugar cane, or used cooking oil imported from China, instead of renewable crop-based feedstocks grown on American farms.”