NBAA Continues Advocacy for SAF Blender’s Tax Credit

Aug. 31, 2021

Further demonstrating its commitment to the use of sustainable aviation fuel (SAF) to reduce aviation emissions, NBAA recently joined with dozens of leading industry stakeholders in encouraging congressional leaders to include a blender’s tax credit for increased SAF production in upcoming legislation.

“As organizations committed to decarbonizing aviation, we respectfully request that Congress include a meaningful, long-term refundable tax credit that would better incentivize the production and use of [SAF] as it considers climate-related proposals for the budget reconciliation bill,” reads the letter to U.S. House Speaker Nancy Pelosi (D-12-CA), Senate Majority Leader Chuck Schumer (D-NY), House Ways & Means Committee Chair Richard Neal (D-1-MA) and Senate Finance Committee Chair Ron Wyden (D-OR).

Read the full letter to congressional leaders.

Derived from a diverse array of renewable sources, SAF is widely considered to hold the greatest potential for reducing greenhouse gas (GHG) emissions from aviation, which is one of the most difficult sectors to de-carbonize.

While the use of SAF curbs lifecycle GHG emissions by up to 80% compared to conventional jet fuel, economic factors and production constraints have hindered widespread availability of these fuels. “An SAF blender’s tax credit is the best mechanism to send a long-term investment signal and create a vibrant domestic SAF market,” the letter continued.

Earlier this year, Reps. Brad Schneider (D-10-IL), Dan Kildee (D-5-MI), and Julia Brownley (D-26-CA) introduced the Sustainable Skies Act (H.R. 3440), which would create a new, 10-year performance-based tax credit for production of SAF achieving a 50% or greater reduction in lifecycle GHG emissions, capped at a $2 per gallon credit on production of SAF demonstrating a 100% emissions reduction.

The companion Senate bill (S. 2263) was introduced by Sens. Sherrod Brown (D-OH), Maria Cantwell (D-WA), Patty Murray (D-WA) and Raphael Warnock (D-GA).

The House bill currently has 43 co-sponsors, thanks in part to NBAA’s extensive advocacy for the measure. The tax credit was also part of the Biden-Harris administration’s “Made in America Tax Plan” proposal released in April.

NBAA is among 63 industry signatories to the Aug. 25 letter, which further emphasized the blender’s tax credit should also be refundable to support investment in the nascent SAF industry, similar to existing tax credits on biodiesel and renewable diesel mixtures.

“As Congress considers this once-in-a-generation investment in combating the climate crisis, it is crucial that the proposals being put forward have a real-world impact and not run the risk of merely becoming on-the-books, underutilized tax policy,” the letter concluded. “We hope the breadth of our coalition speaks to how indispensable we view refundability and long-term duration for any prospective SAF proposal.”