Sustainable Aviation Fuel Act
The Sustainable Aviation Fuel Act is a broad package aimed at materially expanding the use of sustainable aviation fuel (SAF) and driving deeper decarbonization of U.S. aviation. It sets explicit national emission-reduction goals for aviation (net 35% reduction by 2035 and net zero by 2050 relative to 2005), creates a comprehensive Low Carbon Aviation Fuel Standard to penalize higher-carbon fuels and reward lower-carbon fuels, and directs multiple federal agencies to accelerate SAF production, research, and procurement. It adds substantial funding and tax incentives (through 2032 for SAF credits and a new production property credit) to support SAF scaling, supports the Department of Defense in buying SAF, expands FAA research to include fully drop-in SAF, and directs DOE to study farm and conservation crops for SAF production. Collectively, the bill seeks to build a government-led push—through standards, subsidies, procurement, and research—for a robust SAF market and reduced aviation emissions. Potential impact: - Accelerated SAF production and use, with a path to lower aviation carbon intensity and measurable reductions in lifecycle greenhouse gas emissions. - A centralized market for carbon credits tied to aviation fuels, with yearly targets leading toward substantial decarbonization by mid-century. - Greater federal role in funding, tax incentives, and research to catalyze SAF technology, feedstocks, and supply chains, including domestic production. - Public sector demand signals (e.g., DoD and FAA research) that help de-risk private investments and scale production.
Key Points
- 1National aviation decarbonization goals:
- 2- 35% net reduction in greenhouse gas emissions for U.S. domestic and international flights by 2035 (vs. 2005).
- 3- Net-zero greenhouse gas emissions for U.S. domestic and international flights by 2050.
- 4Definition and scope adjustments:
- 5- SAF defined consistently with the IRS code’s existing SAF definitions.
- 6- Includes “qualified feedstock” as sources of hydrogen and carbon not from unrefined/refined petrochemicals.
- 7- Lifecycle greenhouse gas emissions (including land-use change) used to judge fuel carbon intensity.
- 8Low Carbon Aviation Fuel Standard (Section 5):
- 9- The Administrator must establish a national low carbon aviation fuel standard within one year of enactment.
- 10- Fuels are scored by carbon intensity (grams CO2e per megajoule). A credit system allows trading of credits for fuels that beat or miss benchmarks.
- 11- Targets: at least 20% reduction in carbon intensity by 2030; at least 50% by 2050 (relative to 2005 baseline).
- 12- Provisions to calculate and apply carbon intensity using ICAO-adopted methods (or stricter practices), and to account for full lifecycle emissions (including significant land-use changes).
- 13- Credit exchange, transfer rules, and a governance framework with stakeholder consultation.
- 14- State coordination and possible waivers for states with stricter standards; Congress can revoke in favor of other standards if a comparable system is enacted.
- 15Funding and grants (Section 4):
- 16- Adds $200 million per fiscal year (2026–2030) for the existing IRA competitive grant program to support U.S.-located SAF production, transport, blending, storage, or low-emission aviation tech — available through September 30, 2030.
- 17DoD procurement of SAF (Section 6):
- 18- Beginning Oct 1, 2025, the Secretary of Defense must buy SAF for at least 10% of total aviation fuel procured for operations, if SAF cost is competitively fully burdened and produced in the U.S.
- 19- Blended SAF counts toward the 10% if applicable.
- 20- A certification requirement that SAF is suitable for DoD aircraft; national-security waivers allowed with 30-day notice and justification to Congress.
- 21FAA research (Section 7):
- 22- Expands FAA research to include: SAF that can be used without blending; net-zero goals for aviation; climate impacts of non-CO2 emissions (water vapor, contrails); and lifecycle methods for non-CO2 climate effects.
- 23DOE research (Section 8):
- 24- Establishes a program to study use of cover crops or conservation crops for SAF production, in collaboration with national labs, USDA, and industry partners.
- 25Tax incentives and credits extension/expansion (Sections 9–10):
- 26- Extends the production tax credit (Section 45Z) for SAF through 2032 (with SAF-specific terms) and clarifies termination dates.
- 27- Adds SAF production property to the energy investment tax credit (Section 48), with a phasedown schedule (construction beginning 2030–2039 ranges: 24% then 18% then 12%), and recapture provisions if the property doesn’t produce at least 80% SAF within five years.
- 28- Effective dates push to fuel produced after 2025 for these credit changes.
- 29Overall framework alignment:
- 30- Requires interagency coordination (DOE, DOT/FAA, DHS/Defense) and consultation with industry, labor, researchers, and consumer groups.
- 31- Provides mechanisms to supersede or revoke the new standards if Congress or another federal standard sufficiently achieves aviation decarbonization goals.