Sustainable Jet Fuel Prepares for US Takeoff

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Sustainable aviation fuels (SAF) are getting ready for takeoff as policy support for the hard-to-decarbonize airline sector falls into place on both sides of the Atlantic. The EU has set minimum SAF blending mandates from 2025 in a bid to guarantee demand and spur investment. The US is taking a different approach, proposing tax credits and other policy levers to directly drive growth in domestic SAF production. The Biden administration launched its Sustainable Aviation Fuel Grand Challenge last month with the aim of boosting US SAF production from 4.5 million gallons per year currently to 3 billion gallons/yr by 2030 — enough to cut US aviation emissions by 20%. Some $4.3 billion will be shared between seven federal departments working on SAF from the Department of Agriculture providing support to farmers to grow the right biomass feedstocks to the Department of Energy (DOE), which will provide up to $3 billion in loan guarantees for new SAF plants. Democrats' proposed $3.5 trillion budget reconciliation bill includes a blender’s SAF tax credit of $1.50-$2 per gallon that aims to put SAF on a level playing field with renewable diesel. Democrats still must cut the bill's price tag dramatically to win enough support to pass it, but green energy tax credits appear safe for now.

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