Schneider Introduces the Expanding Clean Fuel Production Act

(Office of Congressman Brad Schneider (D-IL 10th)) Congressman Brad Schneider (IL-10), with Reps. Dan Kildee (MI-08) and Julia Brownley (CA-26), introduced today (October 22, 2024) the Expanding Clean Fuel Production Act which would extend for ten years the Section 45Z clean fuel production credit.

The Inflation Reduction Act created the clean fuel production credit (CFPC) for transportation fuel with zero or low greenhouse gas emissions, including sustainable aviation fuel (SAF). This credit currently expires at the end of 2027 and this bill would extend it for ten additional years, making the credit available through 2037.

“I’m proud to introduce this legislation with Reps. Kildee and Brownley to extend the SAF credit, boost production of clean fuels and position the U.S. as a global leader in production and use of sustainable fuels,” said Rep. Schneider. “A ten-year extension would allow for sustained investment in production to accelerate the transition to cleaner fuels and to significantly cut greenhouse gas emissions from the aviation industry, in particular. We are already seeing the impact of the Inflation Reduction Act’s investments on U.S. production of sustainable fuels.”

Schneider authored the tax credit for the production of SAF which was included in the Inflation Reduction Act in 2022 and aims to halve carbon emissions in the aviation sector.

The credit was inspired by a SAF credit included in the Sustainable Skies Act, which Rep. Schneider authored with Reps. Kildee and Brownley in 2021. The credit was ultimately enacted in the Inflation Reduction Act in 2022, will transition into the CFPC in 2025, and will expire in 2027. SAF producers are eligible for a tax credit of $1.25 to $1.75 per gallon.

"The 45z tax credit has been critical in helping to ramp up U.S. production of sustainable aviation fuel,” said Rep. Brownley. “However, we needed to extend the credit long-term to provide market certainty and to ensure a safe and reliable supply of SAF to meet the needs of the aviation industry. I appreciate Congressman Schneider and Congressman Kildee's partnership on this bill, and I look forward to working with stakeholders in the environmental, energy, and aviation community to extend the 45z credit and promote U.S. investment in this critical domestic fuel source."

"In my home state of Michigan, we have already seen the harmful effects of climate change on our Great Lakes,” said Rep. Kildee. “This legislation will help us continue producing clean energy and fuels here in the United States, to help create good paying jobs, provide new markets to Michigan farmers, and reduce carbon emissions from airplanes and other vehicles,"

“As the leading U.S. airline in SAF use and advocacy, we know that extending incentives for U.S. SAF producers by a full ten years is a necessary first step to grow the industry,” said Lauren Riley, Chief Sustainability Officer for United Airlines. “The continued leadership of Representatives Schneider, Kildee and Brownley is helping to assure U.S. competitiveness in SAF and clean fuels, while boosting U.S. agricultural producers and rural communities. We look forward to working with Representatives Schneider, Kildee and Brownley and their colleagues on both sides of the aisle to ensure that this tax credit is both extended and enhanced in a way that will maximize investment in SAF and other clean, low-carbon fuels.”

“Sustainable Aviation Fuel (SAF) is the single most important method to decarbonize aviation in the coming decades, and LanzaJet applauds the leadership of Representatives Schneider, Kildee, and Brownley in advancing SAF tax incentives that will catalyze domestic investment in this critical sector,” said Jimmy Samartzis, LanzaJet CEO. “As the original sponsors of the IRA’s SAF Blender’s Tax Credit via the Sustainable Skies Act, Reps Schneider, Kildee, and Brownley continue to lay the foundation for a vibrant U.S. SAF industry by providing for ten years of policy certainty for domestic SAF producers via this important bill. We look forward to continuing to work with Representatives Schneider, Kildee, and Brownley to develop policy proposals that will both extend and enhance the IRA’s short term SAF tax credits and enable achievement of the goals of the SAF Grand Challenge.”

"We applaud Representative Schneider and his colleagues Representatives Kildee and Brownley for their efforts to extend incentives for SAF,” said Alison Graab, Executive Director of the SAF Coalition. “We look forward to working with them on both an extension as well as enhancing and strengthening the incentive. Advancing sustainable aviation fuel demonstrates a clear commitment to the environmental and economic promises SAF holds, and incentives that are durable and attract investment are essential to unlocking that potential and driving the progress needed to sustain and grow the SAF industry." READ MORE

Excerpt from Ethanol Producer Magazine: The Sustainable Aviation Fuel (SAF) Coalition and Growth Energy are among the groups that have spoken out in support of Schneider’s bill.

“We applaud Representative Schneider and his colleagues Representatives Kildee and Brownley for their efforts to extend incentives for SAF,” said Alison Graab, executive direct of the SAF Coalition. “We look forward to working with them on both an extension as well as enhancing and strengthening the incentive. Advancing sustainable aviation fuel demonstrates a clear commitment to the environmental and economic promises SAF holds, and incentives that are durable and attract investment are essential to unlocking that potential and driving the progress needed to sustain and grow the SAF industry.”

"Farmers and renewable fuel producers are making decisions today about how to invest their time and money in the years to come,” said Emily Skor, CEO of Growth Energy. “With this bill they would be able to make those decisions with greater confidence, and make the kind of investments that increase efficiency, lower their carbon intensity, create jobs, and grow the rural economy," said Growth Energy CEO Emily Skor. "We commend Reps. Schneider, Kildee, and Brownley for taking the lead on this issue in the House, and we look forward to working with them and all of our biofuel champions in this Congress and the next to extend the 45Z tax credit and maximize its benefits for farmers, producers, and the communities that depend on them."

At least two other pieces of legislation have been introduced in recent months with the aim of extending the 45Z tax credit. The Farmer First Fuel Incentives Act was introduced in both the U.S. Senate and the U.S. House of Representatives in September. That bill aims extend the 45Z Clean Fuel Production Credit for an additional seven years, through the end of 2034, and would restrict the credit to fuels made from domestically produced feedstock. READ MORE