It appears the weekend weather in Brazil was as hot and dry or worse than predicted in the areas which have suffered the most the past two months. The forecast for the next two weeks appears to be a bit drier than it was Friday afternoon, but definitely more rain this week than the past two, but less than half of normal rainfall is the prediction. Later today, CONAB, Brazil’s USDA, will issue its Crop Progress Report. That may be scaring the markets a bit because CONAB will not substantially reduce Brazil’s production.
The Treasury Department released on Friday it will allow a new tax credit for sustainable aviation fuel on agricultural commodities to qualify as SAF feedstocks under an updated version of the Energy Department’s relatively ag-friendly model for calculating the carbon intensity of biofuels.
However, there has been contentious debate over the past several months which emissions model the Treasury Department will use to determine greenhouse-gas (GHG) reductions, the U.S. Dept. of Energy’s GREET (Greenhouse gases, Regulated Emissions, and Energy use in Technologies) model or the International Civil Aviation Authority’s CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation). One of these formulas will determine how much of the SAF tax credit a fuel will be eligible, if at all.