Controversial Biofuel Tax Credit in 'Big Beautiful Bill' Estimated to Cost Taxpayers $45 Billion

Journalist Michael Grunwald has sharply criticized a provision within a proposed legislative package, dubbed the "Big Beautiful Bill," that would extend tax credits for crop-based sustainable aviation fuels (SAF). In a recent social media post, Grunwald stated, > "I wrote about the Bloated Biofuels Boondoggle in the Big Beautiful Bill." His article, published in Yale Environment 360, highlights concerns that this measure, primarily benefiting agricultural interests, could cost U.S. taxpayers an estimated $45 billion while undermining climate goals.

The "Big Beautiful Bill," identified as a Republican-led budget proposal, aims to roll back numerous clean energy incentives but notably includes a lavish exception for farm-grown jet fuels. While the overall bill reportedly lacks broad Democratic support, this specific biofuels carve-out has garnered strong bipartisan backing, particularly from farm-friendly Democrats who originated the SAF tax credit in the 2022 Inflation Reduction Act. This unusual alignment underscores the significant influence of agricultural lobbies in Washington.

Critics argue that using crops like corn and soybeans for fuel is not genuinely sustainable, as it can increase food prices, contribute to global hunger, and drive deforestation due to indirect land-use change. The proposed legislation further exacerbates these concerns by explicitly banning any consideration of land-use emissions when calculating which fuels qualify as sustainable. This policy, according to environmental advocates, effectively allows crop-based fuels to be labeled "green" despite their broader ecological footprint.

The scale of potential land conversion is significant; an analysis suggests that producing just 10 percent of U.S. jet fuel from SAF by 2030 could require land equivalent to half the U.S. soybean crop, an area roughly the size of Nebraska. Agricultural interests, facing reduced demand for corn ethanol and soy biodiesel from the rise of electric vehicles, have aggressively lobbied Washington to create new markets in the aviation sector. This lobbying effort has also influenced the debate over scientific models used to assess emissions, favoring those that downplay indirect land-use change.

The European Union, in contrast, explicitly excludes crop-based fuels for aviation due to their devastating land-use effects. Experts like Dan Lashof of the World Resources Institute note the agricultural lobby's powerful influence, allowing them to secure substantial spending for biofuels even as Congress considers cuts to other emission-reducing initiatives. This ongoing policy direction raises questions about the true efficacy of U.S. climate strategies in the aviation sector.