Aviation groups including NBAA and NATA are applauding President Biden’s signing into law of the Inflation Reduction Act of 2022 yesterday. The measure includes an eagerly anticipated blender’s tax credit, which the organizations have supported as a means to boost the growth of the nascent sustainable aviation fuel (SAF) industry and increase investment in it.
Starting on January 1, 2023, a credit of $1.25 will be available per gallon of SAF sold as part of a blend with a demonstrated lifecycle greenhouse gas (GHG) reduction of at least 50 percent compared to conventional jet-A. That credit will increase by one cent for each percentage point reduction in GHG above 50 percent to a maximum of $1.75 a gallon.
“NBAA has long advocated for this blender’s tax credit as a vital step in fulfilling our industry’s pledge to achieve net-zero CO2 emissions by 2050 under the Business Aviation Commitment on Climate Change,” said Ed Bolen, the organization’s president and CEO. “Implementation of this credit marks genuine progress toward increasing SAF production, promoting greater availability at general aviation airports, and reducing costs to end users.”
That credit will be in effect through the end of 2024, when it will be supplanted by the Clean Fuel Production Credit, a similar plan which will apply to all transportation fuels and last through 2027 unless extended by Congress.
Karen Huggard, NATA’s v-p of government affairs, added “the SAF blender’s tax credit and Clean Fuel Production Credit that President Biden has signed into law represent a five-year down payment on the policies necessary to scale up SAF production in line with industry demand.”