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Release Date: 05/02/2024

LANSING – Michigan corn farmers are frustrated by the announcement from the U.S. Department of Treasury (USDOT) limiting corn-based ethanol's contribution to the decarbonization of the aviation sector.

Yesterday’s update to the Department of Energy’s (DOE) Argonne GREET model now pushes farmers to implement a bundle of three additional on-farm conservation practices – cover cropping, minimized tillage, and nitrogen management – for their corn to qualify to make ethanol for the Sustainable Aviation Fuel (SAF) market and access the tax credits available in the Inflation Reduction Act (IRA). The IRA credit requires a total 50 percent reduction in GHG emissions.

“This is another blow for corn farmers in Michigan at a time when farmers are facing increased economic pressures and challenges,” said Jim Zook, executive director of the Michigan Corn Growers Association (MCGA). “The Environmental Protection Agency has already had a negative impact on corn prices with its recent emissions rule, and this new update will set a precedent that threatens to shut corn growers out of a critical future market. We hope that more flexibility will be incorporated in the 45Z rulemaking that comes next, but decreasing prices and an uncertain future are already putting farm families in Michigan and across the U.S. at risk of losing their livelihoods.”

A study published by the University of Nebraska-Lincoln in response to the EPA’s original proposal stated the ruling could result in a farm crisis like the one experienced in the 1980s.

Additionally, the United States Department of Agriculture (USDA) Economic Research Service currently forecasts farm net income in 2024 at $116.1 billion, a 37 percent decrease from 2022.

In addition to inflexible requirements for farmers, the new model makes changes to the international land use change analysis that are seemingly arbitrary and without scientific basis. The changes inaccurately show an increase to the overall carbon intensity score of corn.

The details of the announcement are so complicated and technical that some guidance is still needed. What is certain is that a one-size-fits-all approach to considering on-farm practices is unworkable.

“The updated model released today creates unreasonable requirements for corn farmers that don’t account for the diversity of growing conditions farmers face across Michigan and the U.S.,” said Zook. “These new changes will block farmers from accessing the emerging sustainable aviation fuel market, which is a critical new market for ensuring the long-term sustainability of corn farming. Not only that, but it will ultimately limit the availability of cleaner aviation fuel, which is a key piece in our fight to reduce greenhouse gas emissions.”

To further complicate the administration’s intention, the logistics of segregating grain grown based on prescribed practices make it unfeasible for most storage sites or transportation models, which will limit production and use for SAF.

“If the administration is serious about decarbonizing transportation fuels, they should not be limiting access to the fuel market by creating arbitrary standards for fuel sources,” said Zook. “When the government picks winners and losers instead of focusing on the science, the outcome will be limited availability of cleaner jet fuel – which amounts to a loss for farmers and consumers.”

MCGA looks forward to the opportunity to participate in the upcoming public comment period for 45Z rulemaking. This process provides Michigan agriculture with the much-needed opportunity to describe to agency officials how practices and farm management can be limiting and why flexibility for farmers is a must.