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New SAF Tax Credit

SAF Plane

Corn and soybean producers in one Midwestern state might be able to look for a boost in three years. That’s when Nebraska’s new sustainable aviation fuel (SAF) tax credit goes into effect.

Nebraska is the first Midwestern state to offer the tax credit, which would be 75 cents per gallon.

“The potential of the SAF market in the coming years could be enormous,” said Nebraska Ethanol Board Executive Director Reid Wagner.

He added that the tax credit “marks an important step in realizing that opportunity. As Nebraska looks to the future, this bill ensures our state is in prime position to be a leader in the SAF market.”

SAF supporters see a two-fold benefit from the fuel: It further expands the market for biofuels, and it emits 50% fewer carbon emissions compared to petroleum.

There could be additional federal help for SAF producers. Reuters reported that the Biden administration will release a climate model for its SAF subsidy program on Tuesday, April 30th. The guidelines would dictate how ethanol producers can use climate-smart agriculture to qualify for federal SAF tax credits.

The rule will dictate how ethanol producers can use climate-smart agriculture to qualify for tax credits in the production of SAF. 

According to the United States Department of Energy, “Compared with conventional jet fuel, 100% SAF has the potential to reduce greenhouse emissions by up to 94% depending on feedstock and technology pathway.”

RELATED: Ethanol supporters are pushing for Brazil to drop its tariffs on imported U.S. ethanol. Brazil charges an 18% tariff. The United States doesn’t enforce a tariff on Brazilian ethanol entering the country. Here is the report from Ethanol Producer Magazine. 


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