By Jamie Martin
Under new guidelines by the administration, sustainable aviation fuel (SAF) derived from corn and soybeans can qualify for renewable energy tax credits. However, eligibility hinges on adopting specific farming practices like no-till farming and using cover crops. These requirements, part of the 40B tax credits under the Inflation Reduction Act, aim to promote environmentally friendly farming but have met resistance from farmers who view them as costly and challenging to implement.
Industry experts believe the SAF market could be lucrative, but the financial outlay and yield reductions associated with the required practices might outweigh the benefits. Research indicates that using cover crops could lead to a decrease in crop yields, potentially costing corn and soybean farmers significant revenue per acre. Moreover, transitioning to no-till farming—a key requirement—is a lengthy process that many farmers find daunting.
Farm groups are calling for more support and flexibility in adopting these climate-smart practices. They argue for a more tailored approach that considers local conditions and farming techniques rather than strict, top-down mandates.
Looking ahead, the agricultural community is keenly awaiting further regulations under the IRA’s 45Z tax credit for passenger vehicles, hoping for adjustments that better integrate their needs and the realities of farming practices. The ongoing dialogue between farmers and policymakers is crucial as they navigate the complexities of integrating new agricultural technologies and methods that align with environmental goals.
Photo Credit: pexels-nataliya-vaitkevich
Categories: National