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 tax credit for Sustainable Aviation Fuel (SAF), strongly supported by the National Business Aviation Association (NBAA), as part of its Build Back Better bill.
The tax credit offers $1.25 per gallon, potentially up to $1.75, for SAF that demonstrates at least a 50% reduction in lifecycle greenhouse gas emissions compared to conventional jet-A, effective after December 31, 2022.
The bill also allocates substantial funding for SAF initiatives, including $300 million for the Department of Transportation for SAF development projects, a new Clean Fuel Production Credit for producers starting in 2027, and $225 million for NASA's sustainable aviation research.

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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.”