Nov. 19, 2021
A sustainable aviation fuel (SAF) blender’s tax credit advocated for by NBAA and a broad coalition of stakeholders has been passed by the House of Representatives as part of its Build Back Better legislation.
Under the House’s $1.6 trillion Build Back Better Act, a $1.25 per gallon credit will be available for each gallon of SAF sold as part of a qualified fuel mixture if the SAF has a demonstrated lifecycle greenhouse gas (GHG) reduction of at least 50% compared to conventional jet fuel.
The tax credit, which increases by 1 cent – up to $1.75 per gallon for each percentage point by which the lifecycle emissions reduction of such fuel exceeds 50% – is effective for four years starting Jan. 1, 2023, under the House bill.
In addition to the tax credit, the House bill provides $300 million to the Department of Transportation to establish a competitive grant program supporting investments for projects that develop, demonstrate or apply low-emission aviation technologies or produce, transport, blend or store sustainable aviation fuels.
A provision in the bill also allows domestic producers of SAF to qualify for a new Clean Fuel Production Credit starting in 2027. NBAA and its coalition partners will continue advocacy efforts in the Senate aimed at improving the Clean Fuel Production Credit to provide the level of SAF incentives needed to stimulate long-term production investments in 2027 and beyond.
“The House passage of this blenders tax credit recognizes SAF’s potential to greatly reduce the aviation industry’s near-term GHG emissions, and validates NBAA’s repeated calls to incentivize the production of this drop-in fuel to attract more producers and make SAF more accessible to business aviation users,” said NBAA President and CEO Ed Bolen.
“We applaud the leadership shown by Reps. Brad Schneider (D-10-IL), Dan Kildee (D-5-MI) and Julia Brownley (D-26-CA) in continuing to develop support for the blender’s tax credit and as the Build Back Better Act moves to Senate consideration NBAA will continue to advocate for this provision and targeted improvements to the Clean Fuel Production Credit,” Bolen added.