Iowa state lawmakers in May approved tax legislation that, in part, aims to create a tax credit to incentivize sustainable aviation fuel (SAF) production within the state. The bill is now under consideration by Iowa Gov. Kim Reynolds. 

The bill, S.F. 657, was introduced on May 12. The Iowa Senate on May 13 passed the legislation by a vote of 44 to 1. The Iowa House of Representatives voted to approved the bill by a vote of 84 to 3 the following day. 

If signed into law, the bill would allow eligible businesses to claim a tax credit of 25 cents per gallon of SAF produced within the state using eligible feedstock produced or refined within the state. Eligible feedstocks include ethanol, corn oil, soybean oil, animal fats, used cooking oil and algae. To qualify for the credit, SAF must achieve at least a 50% lifecycle greenhouse gas (GHG) emission reduction when compared to fossil jet. The credit would be in place from 2026 through 2035. The tax credit would be capped at $1 per eligible business per year. 

Americans for Clean Aviation Fuels, a coalition that includes Delta Air Lines, Airbus, Growth Energy, ExxonMobil, POET, Airlines for America, National Business Aviation Association, Corteva, Indiana Soybean Alliance, Iowa Soybean Association, Missouri Soybeans, Ohio Soybean Council, BP, Rolls-Royce, Natural State Renewables, the American Carbon Alliance, Summit Agricultural Group, Renew Kansas and the Corn Marketing Program of Michigan, has spoken out in support of the bill’s SAF provisions. 

“Americans for Clean Aviation Fuels applauds Iowa’s lawmakers and leaders who recognize that the future of domestic energy dominance and air travel will require investments from the top down," said Nick Boeyink, states director of ACAF. “Producers of SAF feedstocks in Iowa will finally have a chance to directly reap the benefits that we have been talking about for years and set the stage for a fully scaled SAF market.”

A full copy of the bill is available on the Iowa General Assembly website.