Sustainable Aviation Fuel Act

This legislation establishes ambitious national goals for the United States aviation sector, aiming for a net 35-percent reduction in greenhouse gas emissions for domestic and international flights by 2035 and net zero greenhouse gas emissions by 2050, compared to 2005 levels. It defines sustainable aviation fuel as fuel derived from qualified feedstocks, not petrochemicals, and outlines lifecycle greenhouse gas emissions to include all stages from feedstock production to fuel combustion and land-use changes. To achieve these targets, the bill mandates the Environmental Protection Agency to establish a low carbon aviation fuel standard for all aviation fuels produced or imported in the U.S. This standard requires a minimum 20 percent reduction in carbon intensity by 2030 and at least a 50 percent reduction by 2050 , relative to 2005 levels. Compliance will be managed through a credit exchange system, where producers of lower carbon intensity fuels generate credits and those with higher intensity fuels purchase them. The bill expands a competitive grant program, authorizing an additional $200 million annually from 2026 to 2030 for projects that produce, transport, blend, or store sustainable aviation fuel or develop low-emission aviation technologies. Furthermore, it directs the Department of Defense to make bulk purchases of sustainable aviation fuel, aiming for at least 10 percent of its operational aviation fuel to be SAF by October 1, 2025. This procurement is contingent on SAF being cost-competitive with conventional jet fuel and refined or produced in the United States, with a waiver option for national security reasons. Significant research and development efforts are also authorized to support the SAF market. The Federal Aviation Administration's research mandate is expanded to include promoting net-zero emissions, studying non-carbon dioxide climate impacts like contrails, and developing methodologies for quantifying these impacts in lifecycle analyses. The Department of Energy is directed to conduct research on using cover crops and other conservation crops as feedstocks for sustainable aviation fuel, collaborating with national laboratories and industry partners. Finally, the legislation provides crucial tax incentives to stimulate SAF production. It extends the clean fuel production credit for sustainable aviation fuel until December 31, 2032, beyond the 2027 termination for other transportation fuels. Additionally, sustainable aviation fuel production property is added to the energy investment tax credit, offering a phased-out credit percentage for construction beginning before January 1, 2039.