Embedded in a bill that passed the U.S. Senate on Sunday, dubbed the Inflation Reduction Act of 2022, is a blenders tax credit for producers of sustainable aviation fuel (SAF).
Among the larger provisions of the bill are investments in projects and incentives designed to promote green energy, along with health care credits and a 15% minimum tax on corporations that make more than $1 billion in profits.
The bill includes a $1.25 per-gallon credit available for each gallon of SAF sold as part of a qualified fuel mixture if the SAF has a demonstrated lifecycle greenhouse gas reduction of at least 50% compared to conventional jet fuel.
The credit increases by one cent for each percentage point by which the lifecycle greenhouse gas emissions reduction of such fuel exceeds 50%, up to $1.75 per gallon and would take effect at the beginning of next year.
The NBAA applauded the conclusion of the credit, which was initially introduced as part of the Sustainable Skies Act.
“Through the Business Aviation Commitment on Climate Change, our industry has pledged to achieve net-zero CO2 emissions by 2050, and increasing the availability of SAF at general aviation airports is crucial to achieving our goal,” said NBAA President and CEO Ed Bolen. “Establishing a robust federal tax credit for SAF is the single most important thing policymakers can do to increase production and availability, and NBAA applauds the members of Congress and staff who tirelessly worked to advance this legislation.”
The credit would apply to all transportation fuels beginning in 2025.
The bill is expected to get House approval as early as Friday and be signed by the President.
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