ETHANOL SWITCH. This chart from the USDA shows total U.S. corn use from 1986 to 2023. The amount of corn used for ethanol production increased substantially between 2001 and 2010, as nearly all gasoline was transitioned to 10% ethanol.

No-Tillers Stand to Gain from Aviation Fuel Tax Credit Update

Update to U.S. tax credit mandates use of no-till, cover crops & efficient fertilizer for ethanol production to receive premium

Federal incentives to lower greenhouse gas emissions could result in additional money for no-tillers. The U.S. Department of the Treasury and IRS released a notice April 30 that makes updates to the Greenhouse Gases, Regulated Emissions and Energy Use in Transportation (GREET) model used to determine the carbon intensity scores of crops used for sustainable aviation fuel (SAF)

SAF sold or used between Dec. 31, 2022, and Jan. 1, 2025, is eligible for a tax credit under Section 40B, created in the Inflation Reduction Act. In order to qualify, the SAF mixture must produce at least 50% less greenhouse gas emissions over its life cycle as compared to petroleum-based jet fuel. Once the SAF meets the 50% threshold, the percentage of greenhouse gas reduction is used to calculate the income tax credit.

“The supplemental amount increases the $1.25 base tax credit by 1 cent for each whole percentage point by which the life cycle greenhouse gas emissions reduction percentage exceeds 50%,” write attorneys at Holland & Knight. “The maximum increase is 50 cents, capping the total credit at $1.75 per gallon. For these reasons, how to determine life cycle greenhouse gas emissions reduction of the SAF is of utmost interest.”

Requirement Debate

In order for corn to qualify for the credit, farmers must use no-till, plant cover crops and apply enhanced-efficiency nitrogen (N) fertilizer on the entire acreage on which each crop is grown. The practice of strip-till qualifies under the definition of no-till. The notice says the pilot program…

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Michaela paukner

Michaela Paukner

Michaela Paukner is the managing editor of No-Till Farmer, Strip-Till Farmer and Cover Crop Strategies. Her previous journalism experience includes working as a reporter for a legal magazine and as a producer for two Wisconsin TV news stations. She has also worked with clients across the globe as a freelance writer and marketing consultant, and as a brand manager for a Wisconsin-based boutique marketing agency. She's a graduate of the University of Wisconsin-Green Bay.

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