Will SAF Turbocharge the Corn Ethanol Market

Richard K. Perrin, Lilyan E. Fulginiti and Felipe Miranda de Souza Almeida

No 413249, Cornhusker Economics from University of Nebraska-Lincoln, Department of Agricultural Economics

Abstract:

The long-run outlook for the corn ethanol industry is questionable, due to a transition to electric and hybrid vehicles. One source of hope for the long run is the potential demand for producing Sustainable Aviation Fuel (SAF). SAF is a key component in the United States Aviation Climate Action Plan, a path to net-zero greenhouse gas (GHG) emissions in the aviation industry by 2050. Demand for ethanol for SAF offers hope to the ethanol industry, but it depends a great deal on policy decisions that are being made now. Here we sketch out this story.

Based on the information available as of March 8, there appears to be a chance that in the long run, SAF could indeed turbocharge the corn ethanol industry. Current average estimates of the CI of ethanol-based SAF are too high for it to qualify for the IRA subsidy, but may still be sufficiently low to be qualified by CORSIA as SAF for the international airline industry. The new 40BSAF-GREET could considerably change its estimates of corn ethanol CI. But the default estimates of CI are not all that matters, given that the CI of a particular batch will be based on documentation of the producer’s supply chain, combined with LCA model analysis. We must wait “a few weeks”, as Secretary Vilsack suggested, for more clarity about the role of the new GREET model and how it will be interpreted by regulatory authorities.

Also covers: What is SAF? What is driving SAF? What is carbon intensity (CI)? How is CI determined? GREET and CORSIA.

Keywords: Production; Economics (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/413249/files/AES_2024-03-20.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:nbaece:413249

DOI: 10.22004/ag.econ.413249

Access Statistics for this paper

More papers in Cornhusker Economics from University of Nebraska-Lincoln, Department of Agricultural Economics Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().