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Technology

How Biden’s Sustainable Aviation Fuel Tax Credits Will Work

On the future of flying, efficient water heaters, and data centers

How Biden’s Sustainable Aviation Fuel Tax Credits Will Work
Heatmap Illustration/Getty Images

Current conditions: It will be 107 degrees Fahrenheit in Kolkata as Southeast Asia’s heat wave continues • Kansas and Oklahoma are on alert for tornadoes and large hail • The Eta Aquariids meteor shower peaks this week.

THE TOP FIVE

1. Biden administration outlines rules for sustainable aviation fuel subsidies

The Treasury Department and IRS yesterday released new details about the subsidy program for producers of sustainable aviation fuel (SAF), which the Biden administration hopes will help cut emissions from the aviation industry while also supporting farmers. What makes SAF “sustainable” is that it comes from biomass (stuff like corn grain, wood mill waste, even manure) instead of petroleum. Burning SAFs for fuel still produces carbon dioxide, but their lifecycle emissions are lower than those of fossil fuels, and they can be used in existing planes, so they are seen as a quick way to cut aviation emissions in the short term.

Under the new guidance, refiners will be eligible for a credit of $1.25 per gallon if their fuel reduces greenhouse gas emissions by 50% compared to traditional jet fuel, and up to $1.75 per gallon if emissions cuts go beyond 50%. The announcement clarified that SAF made out of ethanol is eligible if corn farmers use “climate smart agriculture” such as cover cropping, no-till, and efficient fertilizer application to keep carbon in the soil. Reaction to the announcement has been mixed. Ethanol trade groups were pleased to be included but annoyed at the stringent farming requirements. Environmental groups worry crop-based biofuels will take up too much farmland and could lead to deforestation. “Powering planes with crop-based biofuels is anything but sustainable,” said Dan Lashof, director of the World Resources Institute. Commercial aviation accounts for 2% of U.S. carbon emissions.

2. DOE finalizes water heater efficiency standards

More news from the government yesterday: The Department of Energy announced that most new electric water heaters will have to run on heat pump technology starting in 2029. Water heaters are some of the biggest energy hogs in the average American home. Making them more efficient could reduce consumers’ utility bills by approximately $100 per year, the DOE said. And the energy savings of the new standards are quite astonishing: 17.6 quadrillion British thermal units over 30 years of shipments, “the largest savings ever from a single DOE efficiency standard, representing more than the energy use of the entire U.S. residential building sector in a single year.” As for the climate, the DOE said the efficiency standards will reduce greenhouse gas emissions by 2.5 billion metric tons over 30 years, which is roughly equivalent to taking 18 million gas-powered cars off the road.

3. Microsoft teams up with Brookfield to power data centers with clean energy

Microsoft is throwing significant financial backing behind renewable energy projects to be developed by Brookfield Asset Management that will help power data centers, the Financial Times reported. The wind and solar projects will be built between 2026 and 2030, and have at least 10.5 gigawatts of generating capacity, or enough to power 1.8 million homes. The tech giant will back the projects’ development to the tune of about $10 billion, “in a deal that underscores the race to meet clean energy commitments while satisfying the voracious energy demand of cloud computing and artificial intelligence,” the FT added.

4. Internal documents offer insight into fossil fuel companies’ climate strategies

Congressional Democrats released documents they say reveal how big oil companies have misled the public about their role in causing and fixing the climate crisis. The documents include internal communications from companies like Exxon, Chevron, Shell, and BP. In the exchanges, company representatives cast doubt on the feasibility of limiting global warming to 1.5 degrees Celsius, dismiss the idea that the Paris Agreement should be cause for changing course on fossil fuel production, and acknowledge the huge climate-warming potential of methane. “For decades, the fossil-fuel industry has known about the economic and climate harms of its products but has deceived the American public to keep collecting more than $600 billion each year in subsidies while raking in record-breaking profits,” said Democratic Sen. Sheldon Whitehouse, who chairs the Senate Budget Committee. The committee will hold a hearing on the subject today.

5. Tesla shares dip after Supercharger layoffs

Tesla shares are down by about 5% this morning following news that the company slashed its entire Supercharging unit. Sources toldElectrek that Tesla has already pulled out of four leases on planned Supercharger locations in New York. CEO Elon Musk also confirmed on X that the company will slow construction of new charging stations.

THE KICKER

The North Atlantic broke its 420-day streak of record high sea surface temperatures this week.

X/EliotJacobson

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Podcast

Why Geothermal Is So Hot Right Now

Inside season 2, episode 6 of Shift Key.

Geothermal power.
Heatmap Illustration/Fervo Energy

Geothermal is getting closer to the big time. Last week, Fervo Energy — arguably the country’s leading enhanced geothermal company — announced that its Utah demonstration project had achieved record production capacity. The new approach termed “enhanced geothermal,” which borrows drilling techniques and expertise from the oil and gas industry, seems poised to become a big player on America’s clean, 24/7 power grid of the future.

Why is geothermal so hot? How soon could it appear on the grid — and why does it have advantages that other zero-carbon technologies don’t? On this week’s episode of Shift Key, Rob and Jesse speak with a practitioner and an expert in the world of enhanced geothermal. Sarah Jewett is the vice president of strategy at Fervo Energy, which she joined after several years in the oil and gas industry. Wilson Ricks is a doctoral student of mechanical and aerospace engineering at Princeton University, where he studies macro-energy systems modeling. Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University.

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Technology

What Does OpenAI’s New Breakthrough Mean for Energy Consumption?

Why the new “reasoning” models might gobble up more electricity — at least in the short term

A robot with a smokestack coming out of its head.
Heatmap Illustration/Getty Images

What happens when artificial intelligence takes some time to think?

The newest set of models from OpenAI, o1-mini and o1-preview, exhibit more “reasoning” than existing large language models and associated interfaces, which spit out answers to prompts almost instantaneously.

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AM Briefing: COP Coming into View

On Azerbaijan’s plans, offshore wind auctions, and solar jobs

What’s in the COP29 ‘Action Agenda’
Heatmap Illustration/Getty Images

Current conditions: Thousands of firefighters are battling raging blazes in Portugal • Shanghai could be hit by another typhoon this week • More than 18 inches of rain fell in less than 24 hours in Carolina Beach, which forecasters say is a one-in-a-thousand-year event.

THE TOP FIVE

1. Azerbaijan unveils COP29 ‘action agenda’

Azerbaijan, the host of this year’s COP29, today put forward a list of “non-negotiated” initiatives for the November climate summit that will “supplement” the official mandated program. The action plan includes the creation of a new “Climate Finance Action Fun” that will take (voluntary) contributions from fossil fuel producing countries, a call for increasing battery storage capacity, an appeal for a global “truce” during the event, and a declaration aimed at curbing methane emissions from waste (which the Financial Times noted is “only the third most common man-made source of methane, after the energy and agricultural sectors”). The plan makes no mention of furthering efforts to phase out fossil fuels in the energy system.

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