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White House Climate
Environmental groups say increasing reliance on ethanol is a counterproductive way to address climate change. Yuri Gripas/AP

Environmental Groups Shaped Biden’s Agenda. Except on Ethanol.

The Biden administration said airlines can use corn and soy-based ethanol as an alternative to fossil fuels. Environmental groups say that’s bad for the planet.

Airlines, the Biden administration, farmers and most of Congress share a single vision for the future of sustainable flying: corn and soybeans.

This week, the Biden administration said corn and soy-based ethanol qualify for tax credits as a sustainable alternative to petroleum. The move is a political winner. Airlines want access to the large source of sustainable fuel, and ethanol brings in cash for rural communities and farmers at a time when the popularity of electric and hybrid cars threatens their bank accounts.

But environmental groups say that’s all this is: a counterproductive farm country boondoggle.

“The net effect of the policy is actually to make it harder to solve climate change, not easier,” Dan Lashof, the director of the U.S. arm for the World Resources Institute, told NOTUS. “The problem with dedicating large areas of agricultural land to fuel production is that that increases pressure on land globally. On a global basis, we’re still clearing millions of acres of forests to produce more food, and that is a big contributor to climate emissions.”

The dispute is a sign of the corn and soy lobby’s enduring power, as it cements old political alliances and welcomes new partners like the airline industry. While environmental groups have shaped nearly every rule related to the Inflation Reduction Act, even the Biden White House has drawn the line at ethanol.

The Biden administration made a nod to the environmental concerns in their guidelines, requiring farmers to use “climate-smart” practices in farming the corn and soy for ethanol production. The move infuriated Iowa Republicans. Sen. Chuck Grassley called the administration’s approach “stupid” for the restrictions. But corn and soy-based ethanol, by virtue of their inclusion in the tax credit at all, still won the day.

Roughly 11% of transportation-related emissions come from airplanes in the United States, and the aviation industry is among the most difficult to decarbonize. The IRA is supposed to help with that, providing a monetary discount to airlines that use fuel with lower emissions than petroleum. However, in the process, environmental groups are losing political capital, even in the most climate-conscious White House in history.

Even Democratic Sens. Kirsten Gillibrand, Elizabeth Warren, Bernie Sanders and Cory Booker have flopped to pro-ethanol positions in the last several years, leaving advocacy organizations like the World Resources Institute and the Environmental Working Group without many powerful political allies on ethanol.

Farm and forest waste, trash, or even biofuels created in a lab could also become sustainable aviation fuel. Those are among the types of fuels — called biomass — that the European Union has endorsed for its own airline standards. “They prohibited crop-based biofuels from counting toward new mandatory targets for aviation or shipping. There’s a general recognition that this is a bad idea. But so goes the U.S., so goes the rest of the world,” said Tim Searchinger, a senior research scholar at Princeton University.

As the global population continues to grow, demand for food will grow, increasing the chances that forests will be cut down to create more productive farmland. “So a better answer would be that we gradually return those acres to producing food for people rather than fuel for cars or planes,” Lashof said. “There has to be a pathway for farmers to be prosperous without using one-third of their corn crop for making fuel.”

Voices like Lashof’s, however, are up against a powerful, and organized, group of interests: Agricultural groups, ethanol companies and many members of the airline industry joined together to form a new Sustainable Aviation Fuel Coalition the day the Biden tax credit rules were announced. “It’s not an accident that a new coalition between the sustainable aviation fuels lobby and the various agricultural lobbies was announced. Those are the guys who are going to benefit the most from the new initiative; they’re clearly going to be going around lobbying everyone they can find,” said Vincent Smith, the director of agricultural policy studies at the American Enterprise Institute.

Demand for ethanol as a gasoline supplement has declined as cars become more efficient and drivers move into hybrids and EVs and is expected to drop precipitously moving forward. Turning the corn and soy ethanol supply into airplane fuel is a simple way to bolster the industry, ensuring that demand remains the same for farmers, the airline industry says. Airlines also argue that there’s a lot of competition to use biomass resources in different ways, and there might not be enough new sources of fuel to meet sustainability commitments without corn and soy-based ethanol.

“In the short run, this will be a big plus in terms of annual demand by the nonfood/feed market for corn and soybeans. Over the long run, if we’re basically pretty much universally moving toward EVs and electric power, there’s going to be a shift away from ethanol,” Smith said. “But for now, in the short term, the renewable fuels lobby, in collaboration with the farm lobby, is extremely influential.”

That leaves Lashof, Searchinger and other environmental groups like the Environmental Defense Fund sitting in unlikely agreement with a small camp of free-market economists, who claim that subsidizing ethanol is a waste of taxpayer money and is not an economical way to address climate change, and conservatives, like Sen. Ted Cruz, who does not believe ethanol should be subsidized at all.

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The new tax credit rules will be short-lived, expiring at the end of 2024, but the Biden administration must follow them with a more expansive set of credits that will begin in 2025. Agriculture Secretary Tom Vilsack signaled that ethanol and agriculture will be key to those new credits, and the new SAF coalition could push for even less restrictive requirements on corn and soy.

“What I suspect is going to happen is that the new lobbying group will be now working every door they can get through in Congress to say … You aren’t giving enough credence to corn,” Smith said.

Anna Kramer is a reporter at NOTUS.