CoBank says the Sustainable Fuel Policy (SAF) in the United States has failed to entice the anticipated production of agriculture-based fuel.
So farmers and the industry are now waiting to see what will be on offer when the new program is unveiled in January.
The Sustainable Aviation Fuel Grand Challenge, announced by the Biden administration in September 2021, set production goals of thee billion gallons of SAF by 2030 and 35 billion gallons by 2050 to satisfy all of domestic airline fuel demand.
According to the latest government dashboard of SAF projects, between 2.6 billion and 4.9 billion gallons of SAF may be produced annually by 2030.
Meeting the 36-billion goal depends on policy initiatives and market conditions that give biofuel producers the flexibility to expand production capacity of both renewable diesel and SAF, CoBank said.
The government is finalizing an updated Greenhouse gases, Regulated Emissions and Energy Use in Technologies model, which could include improved accounting for climate-smart ag practices, it said.
According to Jacqui Fatka, farm supply and biofuels economist with CoBank, the delay is causing uncertainty for farmers, biofuel producers and other market participants.
“Biofuel producers are unlikely to move forward on any expansion plans until the new guidance is published,” said Fatka.
“And the delay creates more uncertainty for farmers as they make decisions about planting, input purchases and conservation programs for 2025.”
The first biofuels policy came into effect in 2005, giving rise to a huge volume of ethanol production from corn.
Canada followed suit. The requirement that gasoline include ethanol lifted corn prices into solid profit margins, but also drew complaints from livestock and poultry producers, especially pork producers.
CoBank said that unless there is substantial support for biofuels for aviation, production will only be attractive when corn prices are relatively low.
