An American Airlines worker refuels a plane at Phoenix Sky Harbor International Airport. Photo: Jeff Topping/Getty Images
Bipartisan support is bubbling behind the airline industry in a fight over when plane fuel is "sustainable" enough to benefit from IRA funding.
Why it matters: Airlines say a wonky dispute over modeling will determine how much "sustainable" fuel they can buy — a key part of their climate change goals.
Driving the news: Sixteen senators sent a letter to the Treasury Department on June 16 urging it to allow the use of a U.S.-made model for determining how much "sustainable aviation fuel" (SAF) can qualify for a new IRA tax credit.
- The lawmakers' preferred tool, known as GREET, was created by Argonne National Laboratory and is supported by fuel producers and the airline industry.
- The letter warns of "dire consequences" if there is not a "science-based, United States government-developed model" for companies to qualify for the SAF credit.
Democratic heavy hitters are on the letter: Ag Chair Debbie Stabenow, Appropriations Chair Patty Murray, Homeland Security and Governmental Affairs Chair Gary Peters and Majority Whip Dick Durbin.
- It's also signed by GOP Minority Whip John Thune and farm-state Republicans Joni Ernst, Chuck Grassley and Deb Fischer.
Catch up quick: The Inflation Reduction Act created a $1.25-per-gallon credit for producers of SAF — essentially jet fuel without petroleum that produces less CO2 than what usually powers planes.
- To be considered SAF, the fuel must be certified as reducing lifecycle greenhouse gas emissions at least 50%. The credit can increase up to $1.75 for additional emissions cuts beyond 50%.
- Here's the hangup — the lifecycle must be calculated using either a model created by the International Civil Aviation Organization or a “similar methodology,” according to the text of the IRA.
Yes, but: Climate-focused advocacy groups, like EDF and Rocky Mountain Institute, have told Treasury in comment letters that GREET may not be as comprehensive or comparable to the ICAO rubric to be a "methodology" on its own.
Zoom in: The lawmakers' letter was led by Tammy Duckworth, who recently introduced a bill with GOP senators to codify GREET as a preferred model for certifying when plane fuel is "sustainable."
- She told Jael in mid-June that the FAA reauthorization and NDAA are two avenues she's eyeing for trying to shepherd policies boosting cleaner plane fuel.
Between the lines: Using the GREET model would enable more "feedstocks" and "technologies" to qualify for the IRA benefit, said Lauren Riley, chief sustainability officer at United Airlines.
- "It really [would be] a widening of the playing field for the alternative fuels," she told Axios.
- Riley noted that the credit expires at the end of 2024 and that six months into enactment the credit's sweep is still unclear.
What we're watching: Treasury "expects to issue additional guidance in the coming months," department spokeswoman Ashley Schapitl said in a statement.
