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NBAA joins call for performance-based SAF tax credit in Biden infrastructure plan

 

 

The National Business Aviation Association has joined with a broad coalition representing every segment of the nation’s civil aviation industry in appealing for inclusion of performance-based measures to spur production of sustainable aviation fuel (SAF) in the Biden-Harris administration’s recently-unveiled American Jobs Plan.

Made from non-petroleum feedstocks, SAF is widely considered to hold the greatest near-term potential for reducing aviation’s climate impact, as it can reduce lifecycle greenhouse gas (GHG) emissions by up to 80%, compared to conventional (petroleum-based) jet fuel, with even greater reductions possible in the future.

Despite that impressive figure, as well as an existing $1.00 per-gallon credit for producers and blenders of biomass-derived SAF in the federal tax code, production and availability of the fuel is not meeting current demand.

In a letter to Transportation Secretary Pete Buttigieg, National Climate Advisor Gina McCarthy and National Economic Council Director Brian Deese, the associations call for an SAF-specific blender’s tax credit.

The proposal requests a $1.50 per-gallon credit for production of SAF, with a demonstrated lifecycle GHG reduction of at least 50% compared to conventional jet fuel. Additional 10 cent per gallon credits would then be available for every 10% reduction above 50%, capped at a $2.00 credit per-gallon of SAF with a demonstrated 100 percent GHG reduction.

“Nothing, in our view, would incentivize SAF production and deployment more than a technology- and feedstock-neutral blender’s tax credit that is specific to SAF,” the letter reads. “This escalation mechanism would encourage producers to develop SAF with the greatest emissions reduction potential.”

The associations further noted the performance-based credit system would stimulate SAF production in the U.S. and make the low-carbon fuel more affordable for airlines, general aviation, and other users. “Enhanced SAF production and deployment, of course, would enable the aviation industry to continue its progress in improving efficiency and reducing its emissions, and support U.S. job growth and energy security,” the letter concludes.

“Business aviation has long been focused on the sustainability of flight, and measures to accelerate the production and use of SAF are key to our emissions-reduction goals,” said NBAA President and CEO Ed Bolen. “We look forward to working with the administration on this priority.”

Read the Associations’ Letter (PDF)

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BlueSky Business Aviation News | 8th April 2021 | Issue #600

 

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