April 9, 2021
The recently released “Made in America Tax Plan” from the Biden-Harris administration contains several proposals to incentivize clean energy production, including an NBAA-supported measure to promote broader production and adoption of sustainable aviation fuel (SAF).
“[T]he president’s plan includes a blender’s tax credit for sustainable aviation fuel, enabling the decarbonization of a key portion of the U.S. transportation sector,” reads the plan. “Innovation in these areas could have large spillover benefits to our industrial sector as well as to global efforts to address climate change.”
NBAA has long sought such incentives to spur greater use of SAF by mitigating the fuels’ higher cost and increasing its availability to operators. The association is an active member of a broad coalition of groups, representing every segment of the nation’s civil aviation industry, that is actively supporting legislation to establish a SAF-specific blender’s tax credit. Learn more about the Business Aviation Coalition for Sustainable Aviation Fuel.
In a recent letter to Transportation Sec. Pete Buttigieg and other administration officials, the group expressed support for a $1.50 per-gallon credit for production of SAF, with a demonstrated lifecycle GHG reduction of at least 50% compared to conventional jet fuel. An additional 10 cent-per-gallon credits would be available for every 10% reduction above 50%, capped at a $2.00 credit per-gallon of SAF with a demonstrated 100% GHG reduction.
“We are encouraged to see the administration’s support for the performance-based SAF blender’s tax credit, which will incentivize production and help level the playing field with renewable ground transportation fuels,” said NBAA President and CEO Ed Bolen. “Through increased SAF production, this next generation drop-in fuel has the potential to help our industry meet its aggressive sustainability goals.”
Multiple technology pathways exist to produce SAF from any number of renewable feedstocks, from plant biomass to environmental waste. The proposed blender’s tax credit is “feedstock neutral” providing flexibility for new pathways under development. The administration’s tax plan is a starting point for negotiations on Capitol Hill, and NBAA will keep members apprised of the latest developments.