Sometime in the next few weeks, the Department of the Treasury is expected to decide who—or, really, what—will qualify for a new set of tax credits. The credits were created under the Inflation Reduction Act, which many argue was misnamed, and they involve “sustainable aviation fuel,” which some argue is an oxymoron. For months, a debate has been raging over how the credits should be allocated, and though the arguments can get pretty deep into the weeds—some of them literally involve weeds—they’re worth attending to because of the stakes. The fight could determine whether key provisions of the I.R.A. help to address climate change or end up making things worse. As a briefing paper from the Environmental Defense Fund (E.D.F.) put it, there is a risk of substituting “one environmental threat for another.”
Key to the debate are two unfortunate facts, the first of which is that aviation emissions are a big problem. Planes account for roughly two per cent of the world’s CO2 emissions, meaning that, if all the world’s aircraft got together to form a country, they’d emit more than the vast majority of actual nations, including Germany, Brazil, and Indonesia. And this still underestimates their impact. Owing to a variety of complex processes, airplane emissions have an oversized impact on the atmosphere; it’s been estimated that, historically, aviation may be responsible for two to four times more warming than the CO2 numbers alone suggest. Meanwhile, in a highly inequitable world, flying is particularly unequal: a study published in 2020 found that just one per cent of the global population is likely responsible for more than fifty per cent of passenger-plane emissions. (Although aviation emissions fell during the COVID lockdowns, they are once again rising fast; according to a recent report, in 2023, they are expected to increase by twenty-eight per cent over 2022.)
The second awkward fact is that airline emissions are tough to deal with. A plane can carry only so much weight and still get off the ground; therefore, jet fuel has to provide a lot of energy per pound (or, if you prefer, gallon). Batteries—even the theoretically most efficient sorts—don’t have the needed energy density, meaning that, except for short hops, electrifying flight is, for the foreseeable future, impossible. Planes are also very expensive and must meet strict safety standards. This puts a premium on finding “drop-in” fuels that can simply replace jet fuel in existing aircraft—hence the dream of “sustainable aviation fuel,” which, at this point, is largely just that.
Last month, with much fanfare, Virgin Atlantic announced that it had become the first commercial carrier to complete a transatlantic flight powered entirely by sustainable aviation fuel, or, for short, SAF. The company flew one of its Boeing 787s from London to New York mainly using what’s known as HEFA—hydrotreated esters and fatty acids—which is typically made from tallow and other forms of waste fat. (The flight was partly funded by the British government.) Richard Branson, the airline’s founder and president, who was on board, declared, “The world will always assume something can’t be done, until you do it.”
But, as even the airline acknowledged, the flight was designed to get the attention of regulators—that is, for publicity purposes. Last year, production of fuel that was labelled SAF was sufficient to meet just one-tenth of one per cent of global aviation-fuel demand. “There’s simply not enough SAF,” Shai Weiss, Virgin Atlantic’s chief executive, said.
This shortage is what the I.R.A. tax breaks are supposed to address. The credits, it’s hoped, will foster the development of a new SAF industry. But this raises the question: What fuels are actually “sustainable”?
For the purposes of the tax breaks, the I.R.A. is clear on this subject. It considers an aviation fuel to be eligible for a tax credit if it produces no more than half the life-cycle emissions of conventional jet fuel. It even stipulates the methodology that should be used—a set of standards that goes by the acronym CORSIA—or something “similar.” According to CORSIA, one fuel that’s likely not eligible is corn ethanol. But the U.S. has a large and very powerful corn-ethanol industry. Together with airlines including United, the industry is trying to persuade the Treasury Department to use a different set of standards that would allow ethanol to qualify for the tax breaks, known as 40B and 45Z. (The credits are worth at least $1.25 a gallon, and potentially more.)
“We strongly encourage Treasury to implement the alternative methodology,” a letter from Growth Energy, a biofuels trade group, to the department stated. These alternative standards make generous allowances for farming practices that supposedly store carbon in the soil—practices that critics aren’t sure actually work and whose effects are very difficult to measure. Environmental groups, for their part, are urging the Administration to stand firm. “We must get the details right,” a coalition of groups, including E.D.F., the Clean Air Task Force, and the International Council on Clean Transportation, wrote to Treasury Secretary Janet Yellen.
The risk here—and it’s a big one—is that the Administration will repeat the mistake that led to the rise of the corn-ethanol industry in the first place. In 2007, Congress passed a bill, the Energy Independence and Security Act, that set numerical targets for the production of “renewable fuels” for use by cars and trucks. As the act’s name suggests, these fuels were supposed to boost energy security. They were also supposed to lower greenhouse-gas emissions.
At the time, it was envisioned that renewable fuels would eventually be made from waste products—cornstalks, say, or wood chips. Instead, what happened was that the country just produced more and more fuel from corn, some fourteen billion gallons’ worth in 2022. (Today, nearly forty per cent of the country’s corn crop is converted into ethanol, up from around ten per cent in the mid-two-thousands.) This had many unfortunate side effects, one of which was to raise the price of food. Another was to encourage farmers to clear more and more land to plant more corn, which, in turn, produced more greenhouse-gas emissions.
Thoughout the past decade and a half, it’s doubtful that blending corn ethanol into gasoline has done anything to boost the U.S.’s energy security. And it’s even more doubtful that it’s reduced greenhouse-gas emissions. According to the most recent analyses, which take into account the effects of what’s known as “induced land-use changes,” corn ethanol provides few, if any, climate benefits. In a draft report, a working group of the Environmental Protection Agency’s Science Advisory Board concluded recently that there’s “a reasonable chance there are minimal or no climate benefits from substituting corn ethanol for gasoline or diesel.” (The report prompted a huge pushback from the ethanol industry.) And what goes for gasoline and diesel also goes for aviation fuel.
It is possible to make aviation fuel out of carbon that’s been sucked out of the air and out of hydrogen that’s been obtained from water. But the process demands a tremendous amount of electricity; a recent report from Britain’s Royal Society noted that manufacturing a gallon of “e-fuel” takes at least three times as much energy as the final product contains. At this point, e-fuels are far too costly (and polluting) to make sense. Meanwhile, the kind of “waste fat” that Virgin Atlantic flew on is, for the most part, already being used for something else, including animal feed and soap. As the same Royal Society report put it, “Much of it is not waste.” And producing jet fuel from crops other than corn, such as palm oil or soy, would probably be an even worse idea than using ethanol; the demand for these crops is already a huge driver of deforestation.
All of this points to what’s probably another unfortunate fact: in the near term, at least, there’s no way to markedly reduce aviation emissions without reducing aviation. France recently banned certain domestic flights; this is supposed to encourage passengers to take a train instead. In Washington, such a proposal would be D.O.A. for a variety of reasons, including the country’s lack of a functioning rail system. But, as the world rapidly runs through its remaining “carbon budget,” it’s time for the U.S.—the country that has used up the largest share of the budget—to face up to facts. Changing course demands actually changing, not just substituting one problem for another. And this is true no matter what methodology you use. ♦
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