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 tax credit for Sustainable Aviation Fuel (SAF), aimed at incentivizing its production and use to reduce aviation's greenhouse gas emissions.
The tax credit offers $1.25 per gallon for SAF demonstrating at least a 50% greenhouse gas reduction, increasing incrementally up to $1.75 per gallon for greater reductions, effective after December 31, 2022.
Beyond the tax credit, the bill allocates significant funding, including $300 million for DOT for SAF project investments and $225 million for NASA for sustainable aviation research and development.

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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.”