Carbon intensity of vegetable-based oils must full account for cross-market substitution effects

The Clean Air Task Force asserts that diverting vegetable oils to the energy sector can create supply gaps filled by carbon-intensive palm oil, effectively bypassing the intent of section 45Z. It highlights that while palm oil is excluded from 45Z credits due to high lifecycle assessments—with CORSIA citing 76.5 to 99.1 g CO2e/MJ—its role as the cheapest global backfill for oils like soy oil can drive overall palm oil consumption. The document notes that Congress already banned palm fatty acid distillates (PFADs) for sustainable aviation fuel (SAF) to address these substitution impacts and urges the Treasury to apply similar rigor to all vegetable oil-based fuel carbon intensity calculations.

• Palm oil is excluded from the 45Z credit because its total lifecycle assessment (LCA) is too high, with CORSIA estimating carbon intensity between 76.5 and 99.1 g CO2e/MJ and the EPA determining it is 80.7 g CO2e/MJ for biodiesel and 86.7 g CO2e/MJ for renewable diesel.
• The use of palm fatty acid distillates (PFADs) as energy feedstocks can create supply gaps in non-energy markets (such as soaps and animal feed) that are typically backfilled by palm oil, potentially resulting in a net outcome similar to using palm oil directly for biofuel.
• Section 45Z prohibits the use of PFADs for sustainable aviation fuel (SAF) to prevent indirect substitution impacts that increase demand for primary oils like palm oil.
• There is evidence in the U.S. that the production of soy biodiesel is driving an increase in the consumption of palm oil, as palm oil acts as the marginal product on the global market when soy oil is shifted to energy sectors.

APA

Firth, S. (2024). Carbon intensity of vegetable-based oils must full account for cross-market substitution effects. Clean Air Task Force. https://www.catf.us/2024/08/carbon-intensity-of-vegetable-based-oils-must-full-account-for-cross-market-substitution-effects/

Chicago

Firth, Sammie. Carbon intensity of vegetable-based oils must full account for cross-market substitution effects. Clean Air Task Force, 2024. https://www.catf.us/2024/08/carbon-intensity-of-vegetable-based-oils-must-full-account-for-cross-market-substitution-effects/.

Wikipedia

{{cite press release |last1=Firth |first1=Sammie |title=Carbon intensity of vegetable-based oils must full account for cross-market substitution effects |publisher=Clean Air Task Force |date=19 August 2024 |url=https://www.catf.us/2024/08/carbon-intensity-of-vegetable-based-oils-must-full-account-for-cross-market-substitution-effects/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{firth2024carbon, author = {Firth, Sammie}, title = {{Carbon intensity of vegetable-based oils must full account for cross-market substitution effects}}, publisher = {Clean Air Task Force}, year = {2024}, month = aug, url = {https://www.catf.us/2024/08/carbon-intensity-of-vegetable-based-oils-must-full-account-for-cross-market-substitution-effects/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }