June 25, 2021
A companion bill to the House of Representatives’ Sustainable Skies Act, which creates a performance-based blender’s tax credit to incentivize the production and use of sustainable aviation fuel (SAF), was introduced in the Senate this week.
SAF is a drop-in alternative to conventional jet fuel that will ensure real reductions in the aviation sector’s global greenhouse gas (GHG) emissions.
Specifically, the bill would establish a long-term blender’s tax credit ranging from $1.50/gallon up to $2.00/gallon for fuels that achieve a 100% GHG emissions reduction.
It was introduced in the Senate by U.S. Sens. Sherrod Brown (D-OH), Reverend Raphael Warnock (D-GA), Maria Cantwell (D-WA) and Patty Murray (D-WA). The legislation was introduced in the House by Reps. Brad Schneider (D-10-IL), Dan Kildee (D-5-MI) and Julia Brownley (D-26-CA).
SAF is a low-carbon synthetic jet fuel derived from sustainable feedstocks, including cellulosic biomass, wastes and residues, waste steel mill gases and captured CO2, which can be used safely in any turbine-powered aircraft. SAF potentially can reduce lifecycle GHG by up to 80% compared to conventional jet fuel and is considered pivotal to achieving the industry’s goal of a 50% net reduction in CO2 emissions in 2050.
Through a dedicated federal tax credit, similar to those applied to other renewable fuels early in their development, the production of SAF can be accelerated, and the fuel can become commercially viable.