Sustainable Jet Fuel Incentives Make Wish List for Spending Bill
by Lillianna Byington (Bloomberg Government) Lawmakers and industry are pushing for incentives to make flying greener as part of a $3.5 trillion tax and spending bill. Democrats, who are prioritizing environmental projects in budget negotiations, say they see support for provisions such as a sustainable aviation fuel tax credit among their caucus. American Airlines Group Inc. and Delta Air Lines Inc. are among the airlines lobbying for government help to buy greener fuel.
House committees aim to draft the massive money bill with much of President Joe Biden’s agenda by Sept. 15. Democrats plan to pass it using budget reconciliation to skirt Republican opposition.
“I am working hard to ensure sustainable aviation fuel investments are included in the budget reconciliation,” said Rep. Julia Brownley (D-Calif.). “I am optimistic that we are going to get key provisions over the finish line.”
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While the airline and sustainable fuel industries back tax credits, analysts question how effective some of the options are.
“It’s a really broad category,” Nikita Pavlenko, a senior researcher at the International Council on Clean Transportation, said.
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Lawmakers have introduced legislation that would create a tax credit starting at $1.50 per gallon for blenders that supply sustainable aviation fuel with a 50% or greater reduction in greenhouse gas emissions compared with standard jet fuel.
Sustainable fuel producers include World Energy, which develops low carbon fuel, and Neste Oyj, which produces renewable diesel and sustainable aviation fuel refined from waste and residues. Gevo Inc. makes a renewable drop-in jet fuel from a range of non-petroleum biomass sources, and LanzaJet Inc. develops sustainable fuel by mixing a waste-based ethanol product with regular jet fuel.
Brownley wants the reconciliation bill to include a blender’s tax credit, similar to the one in H.R. 3440, which she co-sponsored with Democratic Reps. Brad Schneider (Ill.) and Dan Kildee (Mich.). Brownley is also urging the inclusion of infrastructure grants that are part of her Sustainable Aviation Fuel Act (H.R. 741) and money for Federal Aviation Administration research initiatives on alternative fuels.
Sherrod Brown (D-Ohio) got provisions from his Sustainable Skies Act (S. 2263) included in a clean energy package (S. 1298) the Finance Committee advanced in May. He will continue to work to ensure it stays part of the reconciliation legislation, according to his office.
On the House side, Transportation and Infrastructure Chair Peter DeFazio (D-Ore.) wrote Democratic lawmakers Aug. 23 that “passage of a budget resolution gives House Democrats the opportunity to make sure we are not just investing in infrastructure, but also reducing carbon emissions from surface transportation, aviation and ports.” READ MORE
Midlands Voices: Remove this roadblock to expand the use of Iowa-grown renewable fuel (Omaha World Herald)
ME FIRST: Fiscally conscientious law makers are backing some big ticket climate measures too. (Politico’s Morning Energy)
Excerpt from Omaha World Herald: The Sustainable Skies Act is intended to increase the use of sustainable aviation fuel (SAF) blends, which includes Iowa-grown renewable fuel. A tax credit would be available for renewable jet fuels that cut carbon emissions by more than half compared to petroleum. That much makes sense, since low-carbon SAF fuels can be used only in blends with petroleum up to 50% — and some of the ones in development are limited to 10%.
