Industry Coalition Urges Action on SAF Tax Legislation

 - April 26, 2022, 3:40 PM
A broad spectrum of aviation stakeholders has issued a call for Congress to enact a blender's tax credit to increase investment in the production of sustainable aviation fuel. (Photo: Curt Epstein/AIN)

In an Earth Day letter to Congress last week, a broad-based coalition consisting of nearly 80 aviation stakeholders voiced their support for the introduction of a blender’s tax credit to help advance the development and adoption of sustainable aviation fuel (SAF). That coalition included airlines and other operators, manufacturers, state agencies, fuel manufacturers and providers, and pilot groups, along with industry trade groups such as NATA, NBAA, GAMA, HAI, and AOPA.

SAF in its unblended or neat form can provide up to 80 percent lifecycle reductions in carbon emissions compared to conventional jet fuel, and it is considered to play a crucial role in aviation's decarbonization ambitions of carbon neutrality by 2050. To reach that milestone, there must be a major increase in the production of SAF from the 4.5 million gallons produced annually to the three billion gallons by 2030 stated in the White House's SAF Grand Challenge and the anticipated 35 billion gallons a year that aviation will require by 2050.

The blender's tax, which is expected to spur investment in the growing renewable fuels market, has been championed by the Biden administration and is part of the Sustainable Skies Act introduced in the Senate and House.

“The SAF-specific blender’s tax credit of $1.50 to $2 per gallon that was introduced in the Sustainable Skies Act (H.R.3440/S.2263) would promote and accelerate investment in the nascent domestic SAF industry while upholding rigorous environmental standards and ensuring that fuels that achieve the greatest reduction in emissions are eligible for the greatest tax incentive,” the letter to congressional leaders stated.

NBAA president and CEO Ed Bolen added, “This tax policy remains the most effective method to incentivize the production of SAF. NBAA is determined to work with all stakeholders to make a blender’s tax credit a reality.”