by Walker Orenstein (MinnPost) The governor and other supporters argue that incentives for a burgeoning industry can slash emissions, create jobs and provide a future for Minnesota’s large biofuels industry as electric vehicles become a larger share of ground transportation.
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“Ninety-eight percent of our carbon footprint comes in the air,” said Jeff Davidman, vice president of state and local government affairs for Delta, during a legislative hearing in March.
Unlike substituting gas-powered cars with electric vehicles, the question of replacing jet fuel is a tricky puzzle to solve. Electric planes are a possibility, though mainly for shorter flights and smaller aircraft. Hydrogen is another potential fuel being tested. Neither appears close to widespread use in the near future.
That’s why airlines and government officials are clambering for what they have termed “Sustainable Aviation Fuel,” or SAF. It can be made from plant sources like corn and soybeans, used cooking oil, municipal waste and even wood scraps, and can already be blended in with traditional petroleum-based fuel to lower carbon emissions.
“The need for this as a climate strategy is very difficult to argue against,” said Brendan Jordan, vice president for transportation and fuels at the Great Plains Institute, a nonprofit focused on the energy transition. “There just aren’t a lot of other good options for aviation.”
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Delta and Gov. Tim Walz want that growth to happen in Minnesota, inspiring a successful last-minute push at the Legislature for $11.6 million to effectively double new federal tax breaks in an effort to spark a local hub for cleaner aviation fuels.
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Jet fuel made from plants or waste oil is not just something that airlines want. There are plenty of climate advocates who argue it’s one the best ways for airlines to reduce their emissions.
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One 2022 report from the United Nations Intergovernmental Panel on Climate Change says biofuel for jets could offer “significant climate mitigation opportunities under the right policy circumstances,” especially considering the limitations of other decarbonization strategies for aviation. The amount emissions are reduced by the fuel, however, depends on the source — like the type of crop and the fuel production methods — as well as the amount blended into traditional jet fuel.
Production of sustainable aviation fuel tripled between 2021 and 2022, according to the U.S. Government Accountability Office, signaling a growing sector. But even so, the industry is so tiny as to be almost negligible. The total amount of SAF produced in the U.S. only reached 15.8 million gallons last year, the GAO says. By comparison, the major U.S. airlines used 17.5 billion gallons of jet fuel in 2022.
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As part of the federal Inflation Reduction Act passed in 2022, Congress approved tax credits for sustainable aviation fuels that could help expand the industry. President Joe Biden’s administration has a goal for production of at least 3 billion gallons per year by 2030 and 35 billion gallons by 2050.
A vision for a new aviation fuel industry in Minnesota
The location of more than 400 biorefineries needed to meet that longer-term goal and the source of that new aviation fuel is an open question. That’s why Walz and Delta are pushing for Minnesota, and hope a state tax credit will draw an industry here.
Megan Lennon, energy and environment section supervisor at the Minnesota Department of Agriculture, said there is no sustainable aviation fuel being produced in the state. But she said Minnesota has assets that could make it a good market.
For instance, crops grown in Minnesota could be used for the fuel, like corn and soybeans. Another potential option is oil seeds like winter camelina — used as cover crops promoted by the University of Minnesota along with traditional commodity crops — that help preserve water quality.
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Outside of the ag sector, Minnesota also has plenty of wood scraps from forestry, Lennon said.
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Plus, Minnesota has a large airport. Davidman said there are economic and climate benefits of producing fuel close to where it’s used. Delta hopes to make MSP the first airport in its network to have every departing plane use some of the cleaner fuel, and has a broader goal of having 10% of fuel used by the airline to be from the lower-carbon sources by 2030.
Illinois and Washington state have approved their own versions of a tax credit meant to lure a less-polluting jet fuel industry. Minnesota’s Legislature approved $11.6 million for tax credits worth $1.50 for each gallon of fuel that is produced or blended with aviation fuel in Minnesota and sold in the state for use at Minnesota airports. Lawmakers also exempted construction related to biofuel for aviation from sales taxes on building materials.
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Walz has also supported what’s known as a “low-carbon fuel standard,” which are rules that require cleaner transportation fuel over time. Those regulations have significantly grown the market for biofuels in California.
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But he said even though biofuels will probably help power cars for decades, airplane fuel could still be “the future of the industry” given “there’s nothing on the horizon for batteries” to electrify aircraft, Walz told MinnPost last week.
“I’m trying to position our biofuels industry to be there for generations to come,” he said.
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The new Minnesota law says alternative fuel is only eligible for a tax credit if it results in 50% fewer carbon emissions compared to traditional jet fuel.
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Walz, meanwhile, said he recently had the French ambassador to the U.S. make the case on a visit for MSP to be a biofuels hub because of all its international flights. And he referenced an announcement last week that Qatar Airways had signed a deal to use lower-carbon aviation fuel at Amsterdam Airport Schiphol.
“They got a little bit ahead of us,” Walz said. “For us we want that to be, in the United States, to be here in Minnesota.” READ MORE