Tennessee Corn Growers Association’s Statement on Treasury’s 40B Guidance on SAF

Dresden, Tennessee – Tennessee corn farmers are frustrated and unsatisfied by the announcement from the U.S. Department of Treasury (USDOT) limiting corn-based ethanol's contribution to the decarbonization of the aviation sector and sustainable aviation fuel (SAF) through the 40B tax credits. Today’s update to the Department of Energy’s (DOE) Argonne GREET model stated that corn-based ethanol must be grown with additional on-farm conservation practices to apply for tax credits available in the Inflation Reduction Act.

Among the updates made to GREET include measurements involving land use changes related to commodity production. The changes, which are not justified, negatively impact the carbon scores of ethanol, making it more difficult for corn to qualify as a feedstock.

The updated model will also require farmers to use no-till practices, enhanced efficient fertilizers and cover crops, which is not practical for all acres of the large and varied geographic region in which corn is grown. These requirements fail to consider the practical realities of farming in our diverse landscape, adding unnecessary burdens to our already hardworking farmers.

“This announcement sets Tennessee farmers back as corn should continue to be a viable source of low-carbon feedstocks for ethanol and ultimately sustainable aviation fuels,” said Carl Schultz, president of the Tennessee Corn Growers Association (TCGA). “The guidance has very limited positive outcomes for Tennessee farmers and farm families as it forces voluntary practices to become mandatory for farmers across Tennessee’s variation of environments where the practices may not be feasible.”

The United States Department of Agriculture (USDA) Economic Research Service forecasts farm net income in 2024 at $116.1 billion, a 37 percent drop from 2022.  This significant decrease in income will have a profound impact on farmers' livelihoods and the agricultural sector as a whole. When farmers all over the U.S. are forced to implement practices to qualify for market access, the one-size-fits-all approach is unworkable. The difference in climate, soil, and season makes it difficult for Tennessee farmers to subscribe to the same conservation regimen in all areas of the state, much less in all areas of the country.

TCGA and National Corn Growers Association (NCGA ) and corn growers across the country will increase their advocacy efforts to improve the changes Treasury made to the GREET model as the Biden administration focuses on the next phase of the Inflation Reduction Act for passenger vehicles, referred to as the 45Z tax credit. The 45Z tax credit will take effect at the beginning of 2025. As part of the law, the aviation tax credit will be folded into the 45Z tax credit beginning on January 1, 2025

The Tennessee Corn Growers Association is a grassroots commodity organization that works to enhance the profitability of corn producers.  TCGA is affiliated with the National Corn Growers Association, which has more than 36,000 dues-paying members nationwide.