Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

U.S. lawmakers weigh tax credit for soybean oil-based aviation fuel

Stock MarketsNov 18, 2021 01:21PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: A decal stating "This Aircraft Flies On Renewable Fuel" is seen on a business jet in Las Vegas, Nevada, U.S. October 21, 2019. REUTERS/David Becker

By Laura Sanicola

(Reuters) - U.S. lawmakers are weighing a bill that would allow soybean oil-based jet fuel to qualify for an unprecedented tax credit, a win for biofuel producers and a blow to environmental groups that say crop-based materials undermine the benefits of making greener fuels.

The White House has set ambitious targets to lower aviation emissions by 20% by 2030 and has touted sustainable aviation fuel, which is currently made in small quantities from used cooking oil and animal fat, as a means to hit those targets.

While numerous industries are pursuing ways to decarbonize vehicle use, some modes of transport, like heavy trucking and aviation, are viewed as difficult to convert to electric power.

Biofuel groups say it will be impossible to meet such targets without utilizing ethanol and soybean oil and want the current model for determining eligibility for the tax credit to be changed.

Some environmental groups, however, argue that increased demand for crops causes land, including rain forests, to be cleared in the United States and abroad.

Petroleum refiners have ramped up production of green fuels, supported by tax credits such as the biofuel blenders tax credit and various low-carbon fuel standards.

An early version of the $1.75 trillion Build Back Better bill currently being negotiated in Congress drew criticism from U.S. farmers and the growing sustainable aviation fuel industry. They opposed a clause that said producers would have to demonstrate a carbon score at least 50 percent better than the fossil fuel alternative, based on a model developed by the International Civil Aviation Organization (ICAO).

ICAO's land-use penalties are three times higher than the leading U.S. model, known as GREET.

The latest version of the bill, updated on November 3, specifies the fuel production pathway could be "similar to that" adopted by ICAO, but also satisfies criteria under the Clean Air Act. It could be achieved by allowing fuels including soy-based jet fuel, as well as others.

"This leaves the door open for soy-derived SAF and threatens to undermine the climate benefits of a SAF credit," said Nikita Pavlenko, senior researcher with the International Council on Clean Transportation Fuels team. He added that ethanol-based fuel seemed less likely to meet ICAO or GREET standards.

The latest version of the Build Back Better legislation puts tax credits for SAF between $1.25 to $1.75 a gallon, depending on the feedstock used.

The changes could mean U.S. petroleum refiners will consider producing more sustainable aviation fuel at scale. Oil companies like Marathon Petroleum (NYSE:MPC) and Chevron (NYSE:CVX) have been relying on soybean oil as a primary feedstock for renewable refining projects and have bought soybean crushing plants to ensure enough supply, with soybean prices soaring.

U.S. lawmakers weigh tax credit for soybean oil-based aviation fuel

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email