More work needs to be done to improve how canola ranks in the U.S. renewable fuel tax credit system, according to executive director of the Canadian Oilseed Processors Association (COPA). It is said that there is.
After taking a few days to digest the U.S. Treasury’s long-awaited announcement last week regarding new requirements for the Sustainable Aviation Fuel Tax Credit, COPA’s Chris Velvet says there are some positive aspects to canola. There were also several areas where further work is needed to increase demand for crops as feedstock for renewable fuels in the growing US market.
First, he points out that last week’s announcement confirmed that canola-based sustainable aviation fuel (SAF) will be eligible for a retroactive $1.25 per gallon tax credit in 2023 and 2024.
“That’s good news,” Velvet says. “Even better news is that Canadian canola is on the way through this newly updated GREET model, a new model that will be used going forward to calculate the carbon intensity of the various feedstocks used to produce the fuel.” It means it’s open.”
At the same time, he talked about an additional $0.50 per gallon tax credit available for SAF made from U.S. corn and soybeans grown with what the U.S. government considers “smart climate-smart agricultural practices.” He said the canola-based SAF had been left “on the outside looking in.” No-till, more efficient fertilizers, cover crops, and more.
While last week’s announcement was guidance on the 40B blender tax credit for SAFs sold by the end of 2024, the renewable fuel sector’s focus is on the upcoming 45Z clean fuel production tax credit, which will run from 2025 to 2027. is paying attention to. Canola is associated with all major renewable fuels: biodiesel, renewable diesel, and sustainable aviation fuels.
“There is work that needs to be done to improve canola’s carbon intensity score and ensure future eligibility based on carbon intensity for this new tax credit starting in 2025,” Vervaet said. explains.
What this means for the ongoing expansion of canola crushing infrastructure in Western Canada is yet to be determined, but details will be worked out to support better carbon intensity scores for canola for tax credits starting in 2016. There’s an opportunity, he says. 2025.
Hear more from COPA’s Chris Vervaet about where canola fits into the U.S.’s new renewable fuel tax incentive criteria.
Related: Construction of new crushing facility underway as demand for U.S. canola oil increases
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