SAF Tax Incentive Will Attract More US Airlines

Leading US aviation industry experts have welcomed new tax incentives which will encourage the adoption of sustainable aviation fuels (SAF).

The Inflation Reduction Act of 2022, approved by the US senate on Monday, will aim to address the ongoing inflation crisis by allocating $369 billion to reducing greenhouse gas emissions and investing in renewable energy.

Under the new bill, airlines will be provided with a $1.25 per gallon tax credit for each gallon of SAF sold. SAF producers will have to demonstrate that their fuels can help cut greenhouse gas (GHG) emissions by 50 per cent as part of a qualified mix compared to regular jet fuel.

The National Air Transportation Association (NATA) and the National Business Aviation Association (NBAA) have both offered their support for their bill.

NATA released a statement on Sunday saying the five-year tax provision will be a good incentive for producing renewable jet fuel and accelerating the industry’s progress to net-zero carbon emissions.

“The SAF tax credits…are a crucial first step toward meeting the Biden administration’s SAF Grand Challenge goal of 3 billion gallons of domestically produced SAF by 2030,” said NATA president and CEO Timothy Obitts.

NATA applauds the US Senate for taking action to incentivise SAF production, and we encourage Congress to work just as diligently to equip federal agencies, including EPA, with the necessary tools to support SAF production in line with industry demand,”

American Airlines could adopt more SAF
Industry representatives say the Inflation Act will encourage quicker adoption of SAFs in the US © Kit Leong/

Ed Bolen, president and CEO of NBAA, iterated similar enthusiasm saying that the bill is an important stepping stone for SAFs.

“Establishing a robust federal tax credit for SAF is the single most important thing policymakers can do to increase production and availability,” said Bolen.

“Through the Business Aviation Commitment on Climate Change, our industry has pledged to achieve net-zero CO2 emissions by 2050, and increasing the availability of SAF at general aviation airports is crucial to achieving our goal.”

What are Sustainable Aviation Fuels (SAFs)

The aerospace industry has been continually raving about the prospects of Sustainable Aviation Fuels being adopted as airlines look to curve their carbon emissions. But what are they exactly?

As Tommaso Baliani explained for Travel Radar, SAFs are bio-fuels with a very similar chemical structure to the traditional aviation jet fuel, but it with 80% lower carbon emissions. They are produced by processing used cooking oil, feedstock and miscellaneous byproducts of many different productions from different industries that process organic products, other than products from the so-called “energy crops.”

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