IFB members: Don't leave us out of SAF market

BY TAMMIE SLOUP

The potential for ethanol made from Brazilian sugarcane to have favorable treatment over domestic corn ethanol as a feedstock for sustainable aviation fuel (SAF) is a top concern for Illinois farmers.

More than 20 Illinois Farm Bureau members recently advocated in Washington, D.C. July 9-10 for policy that emphasizes domestic feedstocks, such as corn ethanol or soybean oil, be used in the production of SAF.

This past spring, the U.S. Treasury Department published a notice detailing how entities that are producing SAF can qualify for a tax credit under Section 40B of the Internal Revenue Code, which is a tax credit available for SAF produced in 2023 and 2024. The notice also provides a “roadmap” for the development of the guidance that will govern production from 2025-27 under the Section 45Z tax credit.

The 40B credit requires that farmers demonstrate a bundle of sustainable practices including no-till farming, cover crops and energy-efficient fertilizer use for the feedstock to qualify. This has prompted pushback from ag groups, who say the bundled requirements are restrictive and lack the flexibility farmers need to use carbon-reducing practices that work for their farm.

USDA is soliciting more information this month from groups to provide guidance to the Treasury Department to write the regulations for the Section 45Z Clean Fuels Production Credit for SAF.

As part of the Leaders to Washington trip last week, IFB members used part of their time with Illinois’ Congressional delegation to encourage more options and flexibility in farming methods that qualify under 45Z and allow farmers to adjust their methods from year to year.

Otherwise, farmers risk losing out on a projected $2 billion-per-year market.

Michael Bernhard, a member of the state Young Leader committee who farms in Grundy County, talked with U.S. Rep. Darin LaHood, R-Dunlap, about farmer concerns surrounding the tax credits and ensuring the tax incentives to SAF producers trickle down to those who grow the feedstocks.

“We reiterated how we want to get it done right the first time and give farmers the flexibility and make sure that they get paid for these practices if the ethanol companies are getting the tax credits,” Bernhard said.

Many in the farmer group were encouraged after lengthy SAF discussions with U.S. Sens. Dick Durbin, D-Springfield, and Tammy Duckworth, D-Hoffman Estates, including McHenry County farmer John Bartman.

“I think sustainable aviation fuel is fantastic. I’m excited that we as Farm Bureau are advocating for it,” he told FarmWeek. “I think it’s another level of environmentally friendly fuel that comes from Illinois that’s going to take us to the next generation of fuel and use the feedstocks that we have on hand.”

Unfortunately, under the current 40B credit, only about 1% of corn grown in the U.S. now qualifies, while sugarcane ethanol from Brazil is being imported for SAF production. The Biden administration has outlined a plan for the production of 3 billion gallons of SAF by 2030.

“We need to make sure that the family farm and the corn that we produce can be used to help not only the environment, but also make sure that the family farm and the rural economy is successful,” said IFB National Legislation Director Ryan Whitehouse.

Other top issues

Bernhard hopes his aspiration to farm full time is not just a pipe dream.

He works full time as a farm manager and real estate broker, while also farming corn and soybeans.

“There’s not enough of the operation for me to right now go full time, and I need to be able to be competitive in the marketplace,” he said. “That is why we need these USDA loans and provisions in the farm bill to give people like me a chance to be competitive in the marketplace as we’re competing with more experienced farmers for the same land and resources to be a full-time farmer.”

The farmer group also advocated for a Proposition 12 fix in the farm bill, enhanced trade efforts and preserving the estate tax exemption that was doubled in the 2017 Tax Cuts and Jobs Act through 2025.

The group of about 30 members and staff also met with American Farm Bureau Federation staff, a GROWTH Energy representative, staff from House and Senate ag committees, USDA and White House representatives, and visited with a European Union delegation, where they engaged in conversations about the EU’s Deforestation Regulation, among other topics.

As part of their advocacy efforts, they met with U.S. Reps Eric Sorensen, D-Moline; Mike Bost, R-Murphysboro; Sean Casten, D-Downers Grove; Mary Miller, R-Oakland; Bill Foster, D-Naperville; LaHood, and the staff of Lauren Underwood, D-Naperville. Senators Durbin and Duckworth both issued press releases following their meetings with the group.

“I’ll continue to advocate for our state’s farmers as the Senate Agriculture Committee continues its work on the farm bill,” Durbin said, while Duckworth stated: “The work of Illinois’ farmers is so important to the strength of our state and our nation, and I look forward to continuing my work with the Illinois Farm Bureau and farmers across the state to make sure their needs are prioritized in federal policy and included in the next farm bill.”

Both IFB President Brian Duncan and Whitehouse thanked the farmer members who attended.

“The farmer’s voice was heard in Washington, D.C., and I think that it will make an impact that next time there’s a committee hearing, a conference report or a vote in the Senate chamber or the House chamber that our farmers’ voices will be in the back of their heads when they take that vote,” Whitehouse said.