Coalition Urges SAF Tax Credit Inclusion In Biden Plan
A coalition representing every segment of the U.S. civil aviation industry is urging the Biden administration’s recently unveiled American Jobs Plan to include performance-based measures to spur sustainable aviation fuel production.
A letter from nearly 50 coalition members to National Climate Advisor Gina McCarthy, National Economic Council Director Brian Deese and Transportation Secretary Pete Buttigieg calls for a SAF-specific blender’s tax credit. The proposal requests a $1.50 per gal. credit for the production of SAF, with a demonstrated life cycle greenhouse gas (GHG) emissions reduction of at least 50% compared to conventional jet fuel. An additional 10 cents per gal. credit would be available for every 10% reduction of more than 50%, capped at a $2 credit per gal. of SAF with a demonstrated 100% GHG reduction.
“Nothing, in our view, would incentive SAF production and deployment more than a technology- and a feedstock-neutral blender’s tax credit that is specific to SAF,” the letter says. “This escalation mechanism would encourage producers to develop SAF with the greatest emissions reduction potential.”
SAF, made from non-petroleum feedstocks, is “widely considered to hold the greatest near-term potential for reducing aviation’s climate impact, as it can reduce life cycle greenhouse gas emissions by up to 80% compared to conventional (petroleum-based) jet fuel, with even greater reductions possible in the future,” the National Business Aviation Association (NBAA) says. “Despite that impressive figure, as well as an existing $1 per gal. credit for producers and blenders of biomass-derived SAF in the federal tax code, production and availability of the fuel is not meeting current demand.”
The letter follows a bipartisan congressional request to the Government Accountability Office (GAO) for a study exploring effective policy measures to expand awareness, availability and use of sustainable aviation fuels.
“This study offers an opportunity to answer the industry’s central question around SAF: when it comes to availability and use of these pioneering fuels, how far can we go, and how quickly can we get there?” NBAA President and CEO Ed Bolen said. “These fuels hold the promise of dramatically reducing carbon emissions, and we know there is strong demand, which is why we are actively supporting a targeted blender’s tax credit to increase availability.”