Farm Bill

Floor Speech

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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 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 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.

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.
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