[Congressional Record Volume 170, Number 90 (Thursday, May 23, 2024)]
[Senate]
[Pages S3902-S3904]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FARM BILL
Mr. GRASSLEY. Mr. President, I come today to provide some real world
perspective from what I call the real America. I am honored to speak on
behalf of the tens of thousands of Iowa farmers who, this very day, are
tending fields across my home State that feed and fuel America.
I often remind people here in Washington that farmers make up only 2
percent of our population. That means that the other 98 percent of the
American people depend on the livelihoods of just 2 percent of the
people for their next meal.
Here in the U.S. Senate, I am one of only two grain farmers serving
among 98 other lawmakers in this body. This puts me in a unique
position. As a lifelong family farmer and a U.S. Senator, I use my
platform to speak up on behalf of American farmers, and I know there
are lots of other colleagues that I have in this body that do the same
thing for the farmers in their State, but I think I do it with some
hands-on experience.
From one generation to the next, the way of life of these family
farmers upholds our Nation's food security and, in recent decades, has
strengthened U.S. energy independence.
The productivity of American agriculture has empowered the family
farmer to supply the grain for our domestic renewable fuels industry
and to displace foreign oil in the U.S. transportation fleet.
America's farmers embrace best conservation practices to strengthen
soil health and precision agriculture to reduce their carbon footprint
in food and fuel production.
Now, it happens that my State is No. 1 producer of corn and ethanol
and No. 1 in a couple of other areas that I won't go into. Clean-
burning, renewable fuels are better for the environment, lower
greenhouse gas emissions, and create good jobs in rural America and
fuels the economic growth of that same rural America. When it comes to
the hard work and ingenuity of the American farmers, the sky is the
limit, quite literally.
Now, to the point of my remarks today to my colleagues: Let's
consider sustainable aviation fuel and alternate fuel made from
nonpetroleum feedstocks, something the environmental community in the
United States is promoting to get greenhouse gas down.
Scientists say that this next-generation fuel will help lower carbon
emissions in the environment. That is a pretty big shoe print,
considering aviation accounts for 2 percent of all carbon dioxide
emissions and 12 percent for the transportation sector alone.
Sustainable aviation fuel--that goes by the acronym SAF--has
tremendous market potential. According to the U.S. Department of
Energy, more than 360,000 commercial flights have used SAF at 46
airports, mostly in the United States and Europe. That is really just a
spit in the ocean, considering there are more than 10 million scheduled
passenger flights in the United States per year, according to our FAA.
Displacing conventional jet fuel with sustainable products, such as
homegrown feedstocks, presents a tremendous market opportunity for
America's farmers and at the same time reduces greenhouse gas
emissions.
I am proud to say that Iowa is a leader in clean energy. Nearly 20
years ago, I worked to enact the renewable fuel standard and to this
very day keep my thumbs on both Democrat and Republican administrations
to faithfully implement the law as Congress intended.
As chairman of the Senate Finance Committee, I also created the
biodiesel tax credit that has helped to reduce greenhouse gas emissions
by around 74 percent.
Last year, my home State produced a recordbreaking 4.6 billion
gallons of ethanol and 350 million gallons of biodiesel.
Iowa farmers stand ready to help scale up production of this
sustainable aviation fuel--the next generation of airplane and aviation
fuel. But it seems that partisan ideology might be standing in the way
of that effort.
While we can find unanimous agreement that clean air is good for
everyone, finding agreement on public policies to help keep our air
clean is not always so clear-cut. In Washington, it is even harder than
finding a needle in a haystack.
Many people in this town would find reason to argue if the sky was
blue on a cloudless, sunny day. The consensus really clouds over when
Federal bureaucrats bend policy to fit ideology instead of sound
silence.
In December of 2022, I spoke on this very floor to urge the Treasury
Department not to shortchange America's farmers when it wrote rules for
the sustainable aviation fuel tax credit.
Unfortunately, when the Democrats wrote the partisan Inflation
Reduction Act, they chose to ignore our very own Department of Energy
and preferred modeling by the International Civil Aviation
Organization.
Now, that is pure poppycock. U.S. policymakers need to put America
first. That is why I pressed USDA Secretary Tom Vilsack at a hearing in
February this year to champion green feedstocks for the sustainable
aviation fuel market because he is a big voice in this administration.
America's farmers are ready to provide low-cost and low-carbon fuel
to consumers, whether that is on land, air, or sea.
For years, I have been fighting in the trenches to stop the Obama and
Biden administrations from misguided regulatory schemes. I am glad that
the Supreme Court recently kept check on their ridiculous plans,
commonly known as the waters of the United States rule, that would have
regulated dry creekbeds and mud puddles on family farms.
When the government starts meddling and telling farmers how to farm
and how to raise livestock, you can bet your boots that environmental
extremists are bending the ears of bureaucrats and pushing
policies disconnected from reality. Writing Federal regulations not
backed up by science or common sense is hogwash.
Two weeks ago, the Biden administration put lipstick on a pig when it
released guidance to qualify for new Federal incentives for sustainable
aviation fuel.
So as the senior Senator from Iowa and a lifelong family farmer, I am
here to squeal on the Biden administration's stupid regulations. The
decision-making process clearly got mired in politics and bureaucratic
nonsense, not the sound science that has governed this process for
about three decades.
So let's take a closer look at the guidance issued by the Treasury
Department 2 weeks ago. The regulations would be used to implement
section 40B sustainable aviation fuel tax credit. That is the Federal
subsidy enacted in the Inflation Reduction Act to help this alternative
fuel lift off and scale up to meet market demand.
Unfortunately, rather than adopt the science-based GREET--I am going
to spell that because it is an acronym, G-R-E-E-T. The science-based
GREET model has been used by EPA and others to measure the carbon
intensity of
[[Page S3903]]
biofuels, and they have been using that formula for decades.
Now, the Biden administration guidelines instead played politics by
adopting an untested and untried modified GREET model to determine
lifecycle carbon emissions of corn and soybeans for the purpose of
calculating who can qualify for this sustainable aviation fuel tax
credit, and therein lies the rub.
Let me explain. First, everything in Washington goes by an acronym.
GREET stands for these words that I don't know how you connect the
title with the acronym, but here is what it says: G-R-E-E-T stands for
``Greenhouse gases, Regulated emissions, and Energy use in
Technology.''
The Department of Energy's Argonne National Laboratory--a very
respected laboratory--began developing the GREET analysis 30 years ago,
back in 1994.
So that is why I said we have had decades of the use of this. It was
a science-based agreement that they came to for this formula, and now,
the politicians step in to reform it or to change it.
Scientists use the methodology to analyze the environmental impacts
associated with all stages of the supply chain.
Now, in a nutshell, the Federal Government three decades ago launched
a process to measure the energy output and environmental performance
that could inform policies throughout government of energy efficiency,
affordability, and sustainability.
Scientists develop models for particular purposes to evaluate, say,
greenhouse gas emissions, water consumption, and air pollutant
emissions.
Let me pause here to make an important distinction. Nonpartisan
scientists develop methodologies to inform policymaking. These
methodologies should not be used by political scientists to advance a
political agenda. So you can understand my dismay when I reviewed the
Biden administration's new formula to qualify for sustainable aviation
fuel tax credit.
First, the guidelines, quite, obviously, were written by bureaucrats
who don't know the first thing about family farming; and, second, the
formula is flawed from another fundamental standpoint: It is going to
be easy to violate and nearly impossible to verify and complicate
decision-making for the family farmer.
To put it very bluntly, the Biden administration's GREET model update
is a stupid approach. While the lion's share of Washington can agree
that more widespread use of sustainable aviation fuel is good for the
environment, the new GREET model fell victim to a political lion's den.
The Biden administration caved to extreme environmentalists who
wouldn't know the difference between a corn planter or a combine, let
alone what the effects of uneven emergence means on crop yields or how
soil compaction impacts germination of seed.
Every spring, farmers try to hit the ``Goldilocks'' sweet spot: not
too wet, not too dry, with just the right soil temperature when they
plant to produce the best possible yields.
Every field on every farm is different. For example, no-till versus
what we call conservation tillage is tailored to the requirements of
that farm. And some of those requirements are based upon the soil
conservancy law that I helped pass in 1986.
Farmers are stewards of the soil, passing down this heritage from one
generation to the next. It is obvious that the Biden administration
either doesn't care or doesn't get that its GREET formula is pigheaded.
The formula says all or nothing in order for farmers to qualify as a
sustainable aviation fuel producer and help the aviation industry
achieve its clear goals.
America's farmers stand ready to help clean the air, and I am here
today to clear the air on how the Biden administration is standing in
their way.
For those who want to argue that these regulations make sense, let me
explain why they won't work in the real America. Let's consider the
practical impact of the Biden administration's proposed rule. In the
fall, when crops are harvested, the grain is transported from the field
to the market. From the combine, it goes into a wagon or a truck that
takes it to the local elevator.
On my family farm, we go to the local elevator in New Hartford. Tens
of thousands of farmers are doing the same thing. In fact, in Iowa, it
is 86,000 family farmers. I say ``doing the same thing.'' That means
either hauling it straight from the field or, after a period of on-farm
storage, then taking it to market. Sooner or later, grains are weighed,
graded, and commingled with hundreds of millions of bushels of grain
from fields across the State--all coming from those 86,000 different
family farmers in my State.
Do you see where I am going here? Let me summarize.
First, to qualify for the maximum SAF credit and additional carbon
intensity score reductions, the Biden administration dictates that
farmers must comply with the U.S. Department of Agriculture's Climate
Smart Agriculture pilot program, and that requires compliance with the
following mandates on the same acres: You have to practice what we call
no-till farming. You have to plant cover crops in the fall, after you
harvest, to protect the ground through the winter and, more
importantly, not to have soil loss in the spring. Then you have to use
enhanced-efficiency nitrogen fertilizer.
Now, when we first heard about this, what direction they might go, it
said you would only have to apply for one of these three in order to
get the tax credit. That is when the outrageous opinions of
environmentalists came in and said: No. We have to have them apply to
all three.
I don't think that these bureaucrats think in terms of the fall and
that if you don't harvest the last of your corn crop until November and
the ground freezes, you can't plant cover crops at that time. You have
to plant your cover crops in the early spring so that they grow and get
some root and can preserve that root through the spring and turn green
the next spring. But if it is frozen, you can't do that. That is just
one example that makes me wonder if these bureaucrats in Washington
know what they are talking about.
Now, for the soybean farmer, it is a little less in the number of
requirements. You just have to do no-till farming and plant cover crops
in the same acres.
The fact is that not every--let me emphasize this--climate-smart
practice that the USDA has works on every farm in the same way. In this
town, one size fits all. The GREET update, then, is unworkable for the
family farmer. Unrealistic burdens on farming are counterproductive to
feeding and fueling the world.
Let me entertain the idea that farmers who want to participate have
complied with all of these criteria. Now they must pass another dog and
pony show: The sustainable aviation fuel producers or importers must
get unrelated third-party verification that their feedstocks have met
eligibility requirements. Of course, only accredited verifiers can
grant certification to these individual farmers. This la-la land of
verification will be paved with endless miles of redtape and loopholes
as far as the eye can see.
The Biden administration's changes to the GREET model need a do-over.
Bureaucrats who know nothing about farming shouldn't be telling farmers
how to grow their corn and soybeans. This is the kind of policy that
farmers resent--and rightly so--because it is out of touch with what
actually goes on on the family farm. President Biden is abandoning Iowa
farmers with this boneheaded update.
Now, I think there might be a little bit of good news if rumors
around this town mean anything. I think there are a lot of people in
this bureaucracy--and there are four bureaucracies involved in making
these sustainable aviation fuel rules. It is only the Treasury that
announces them, but other Departments have a hand in it. I think there
are people right here in this town who know what I describe that is
wrong with these rules and are ready to rewrite them. Of course, these
rules were written for what we call the section 40B tax credit rules.
That expires at the end of this year. Then there is going to be a new
rule. Section 45Z will take over. Maybe we will have a whole bunch of
new faces in town after the first of the year, when those rules are
read, but I think people even today realize that what I have described
here isn't workable.
So as Washington prepares to distribute tens of billions of dollars
in
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Federal incentives for sustainable aviation fuel, I will continue to
battle on behalf of the American farmer and taxpayer.
From the IRS to the EPA and the USDA, the alphabet soup of Federal
Agencies makes consequential decisions that impact the lives and
livelihoods of real people, from the taxpayers to small businesses and
family farmers across America.
The Biden administration's GREET model needs to stick with sound
science, not political science.
Before I yield the floor, I ask unanimous consent that newspaper
articles from the May 8 issue of the Iowa Farm Bureau Spokesman
newspaper--a front-page story entitled ``Sustainable Aviation Fuel Tax
Credit Rules Announced'' and, on page 11 of the same newspaper, a
section entitled ``Questions Surround Impact of SAF Guidance''--be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Sustainable Aviation Fuel Tax Credit Rules Announced
[May 6, 2024]
The U.S. Treasury Department issued its long-awaited rules
for the sustainable aviation fuel (SAF) 40B tax credit last
week, but biofuel and farm groups say the requirements have
created more questions than answers.
The SAF tax credit, established by the Inflation Reduction
Act (IRA) in 2022, aims to incentivize the production of SAF
that achieves a lifecycle greenhouse gas (GHG) reduction of
at least 50% when compared to petroleum-based jet fuels. The
administration has laid out goals for producing at least 3
billion gallons of SAF annually by 2030 and up to 35 billion
gallons annually by 2050.
SAF that meets the 50% GHG reduction qualifies for a tax
credit of $1.25 per gallon, with additional incentives up to
$1.75 per gallon for greater reductions.
However, biofuel advocates say the rules authored by the
Treasury Department and Internal Revenue Service are overly
restrictive and prescribe specific farming practices that may
not be practical in all areas of the country.
``As the top producing state of lower cost and cleaner-
burning biofuels, sustainable aviation fuel is an emerging
market with huge potential for Iowa agriculture,'' said Iowa
Secretary of Agriculture Mike Naig. ``Unfortunately, the
Biden administration is once again telling Iowa farmers that
Washington, D.C., knows best. The administration's proposal
mandates rigid requirements that ignore the innovation of
agriculture and fails to recognize farmers' ability to
incorporate the practices that work best for their individual
operations.''
The 40B tax credit rules incorporate an updated version of
the Greenhouse Gases, Regulated Emissions, Energy Use in
Technologies (GREET) model to measure the lifecycle emissions
from SAF, including updated modeling of feedstocks and
processes used in aviation fuel and indirect emissions.
Corn must be grown with no-till, cover crops and enhanced
efficiency fertilizer to be eligible for the tax credit. For
SAF produced from soybeans to qualify, farmers must use both
cover crops and no-till. There also are rules for certifying
that the crops were grown with climate-smart practices and
extensive record-keeping requirements.
``This administration has continually pursued a one-size-
fits-all approach that puts domestic energy production, like
homegrown ethanol, at a disadvantage to international
competitors. Yesterday's guidance is more of the same,'' Naig
said. ``While inclusion of the GREET model is a welcome step,
the details need to be right, and the administration has more
work to do. I know Iowa's congressional delegation will be
working to ensure that Iowa's farmers and biofuel producers
will be able to realize the full potential that SAF offers.''
Industry analysts note that very few farmers will be able
to take advantage of the 40B credit this year since they
likely haven't documented the required practices. Current SAF
production levels are also very small.
In January, LanzaJet opened an SAF production facility in
Georgia that will produce 10 million gallons of SAF from
ethanol. The company is reportedly using Brazilian sugarcane
ethanol as a feedstock due to its lower GHG lifecycle score.
The Section 40B credit expires at the end of this year and
will be replaced by a new, more expansive tax credit, called
45Z However, the rules have yet to be written for 45Z and
aren't expected until mid to late winter.
____
Questions Surround Impact of SAF Guidance
The Biden administration last week gave guidance on its
sustainable aviation fuel (SAF) tax credits that have been
long awaited by both corn growers and environmentalists.
We've been told since February that an announcement was
expected, and it was delayed several times between then and
now. Such is the world of politics. While the announcement is
a step in the right direction, it may have brought about more
questions than answers. Here's what we know so far.
The bottom line for corn growers is that corn-based ethanol
will be allowed to qualify for the tax credit program. This
is a win for an industry that has been losing global market
share to South America for the past several years.
According to the policy, there are three stipulations to
qualification. These include the use of no-till practices,
the use of cover crops and the use of enhanced-efficiency
fertilizer that holds carbon in the soil. All three practices
must be done on the same field and must be able to be
certified for the corn to qualify. For soybeans (as it
pertains to bio-diesel), qualification is dependent on the
use of just no-till and cover cropping.
The bottom line for the markets is that this has little to
no effect on supply and demand for the current crop year.
There is currently one singular plant producing SAF online
in the United States; therefore, demand is limited to that
one plant's needs. There is also uncertainty about whether
corn ethanol or soy biodiesel produced from fields using all
the climate-smart ag practices will be competitive against
other low-carbon feedstocks without carbon sequestration.
Carbon sequestration is, more or less, the practice of
storing carbon under the ground. Many of you have probably
heard talk of carbon pipelines recently; those are what, in
theory, would take the carbon from an ethanol plant or
biodiesel plant and transport it underground to be stored.
The last piece we know is that the Section 40B tax credit,
the policy's official name, is only in effect through the end
of 2024. In 2025, a broader tax incentive known as 45Z will
take effect. There wasn't guidance given on 45Z, likely
because there is a presidential election between now and
then--the results of which likely determine whether the
credit is still around in 2025 and whether corn and soybeans
will qualify under the new rules.
Mr. GRASSLEY. I yield the floor.
The PRESIDING OFFICER. The Senator from Kansas.
____________________