February 7, 2023
BY Erin Voegele
Illinois Gov. JB Pritzker on Feb. 3 signed the Invest in Illinois Act. The legislative package, in part, creates a $1.50 per gallon sustainable aviation fuel (SAF) purchase tax credit to support the supply and use of SAF within the state.
The SAF tax credit will become effective June 1, 2023, and is currently in place through Jan. 1, 2033. The credit applies to SAF sold to or used by an air carrier. To be eligible for the credit, SAF must achieve a 50 percent lifecycle greenhouse gas (GHG) reduction when compared to petroleum-based jet fuel using either the lifecycle methodology for SAF developed by the International Civil Aviation Organization or the most recent version of Argonne National Laboratory’s GREET model.
Advertisement
Prior to June 1, 2028, the credit can be claimed for fuel derived from biomass resources, waste streams, renewable energy sources, or gaseous carbon oxides. Beginning on June 1, 2028, the fuel must also be derived from domestic biomass resources. Fuel produced from palm feedstock is not eligible for the credit. The new law also includes a provision that states until July 1, 2033, on an annual basis, no credit may be earned by an air carrier for soybean oil-derived SAF once air carriers in the state have collectively purchased SAF containing 10 million gallons of soybean oil feedstock.
LanzaJet has spoken out in support of the newly created SAF tax credit. “The passage of the Sustainable Aviation Fuel Purchase Credit positions Illinois as a leader in the energy transition,” said Jimmy Samartzis, CEO of LanzaJet. “These types of incentives accelerate the development of this new industry as we work hard to decarbonize the transportation sector. LanzaJet is excited to play a role in bringing SAF to new consumers across Illinois, and we encourage other states to support the sustainable fuels industry with similar measures and help meet the nation’s climate change goals.”
Advertisement
A group of 28 House members on May 16 sent a letter to President Donald Trump urging his administration to adopt timely, robust Renewable Fuel Standard renewable volume obligations (RVOs) for 2026 and beyond.
Neste and FedEx, the world’s largest express cargo airline, have agreed on the supply of 8,800 metric tons (more than 3 million gallons) of blended Neste MY Sustainable Aviation Fuel to FedEx at Los Angeles International Airport (LAX).
A bill to formally adopt a revenue certainty mechanism to support the production of SAF was introduced in the U.K. Parliament on May 14. The proposed scheme is in the form of a guaranteed strike price.
Delta Air Lines on May 7 announced its strong support for new bipartisan, bicameral legislation that will accelerate the growth of sustainable aviation fuel (SAF) in Michigan. The bill aims to create a SAF tax credit of up to $2 per gallon.
The U.S. EPA on May 14 delivered two RFS rulemakings to the White House OMB, beginning the interagency review process. One rule focuses on RFS RVOs and the other focuses on a partial waiver of the 2024 cellulosic RVO.