House Passes Bill That Includes SAF Tax Credit

If ‘Build Back Better’ is passed, users of sustainable aviation fuel could receive up to $1.75 per gallon.

Ashley Barajas

Friday, November 19, 2021 at 05:46 PM ET

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To receive the credit, the operator must use a fuel that’s part of a qualified fuel mixture. Credit: Adobe Stock

Key Takeaways:

The U.S. House passed legislation including a new blenders tax credit for Sustainable Aviation Fuel (SAF), a measure strongly supported by the National Business Aviation Association (NBAA).
The tax credit offers an initial $1.25 per gallon for SAF that achieves at least a 50% lifecycle greenhouse gas reduction, with the potential to increase up to $1.75 per gallon for greater reductions, effective after December 31, 2022.
The bill also allocates $300 million to the Department of Transportation and $225 million to NASA to support SAF development, production, and research, in addition to a new Clean Fuel Production Credit for domestic SAF producers starting in 2027.

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A bill that recently passed the U.S. House as part of its Build Back Better legislation contains a clause backing a tax credit for sustainable aviation fuel (SAF). This tax credit has been strongly advocated for by the National Business Aviation Association (NBAA).

NBAA’s president and CEO Ed Bolen expressed his support for the passage. “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.”