White House Push for Increase in Sustainable Aviation Fuel

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The White House has taken a strong stance in expanding the production and use of Sustainable Aviation Fuel (SAF) to reduce carbon emissions in the aviation industry. SAFs are liquid hydrocarbon fuels that are blended into the existing fuel supply using materials like waste, fats, cooking oils and corn. The Administration has identified the aviation industry as a climate priority in its push to reduce the country’s carbon footprint.

White House SAF Initiative

The President issued an announcement on September 9, 2021 and an accompanying Climate Action Plan highlighting the administration’s goal of a fully zero-carbon aviation sector by 2050. With respect to SAF, the government plans to scale up SAF production to at least 3 billion gallons per year by 2030. Airlines for America, an industry trade group representing airlines such as Delta, United, and American, announced a commitment to work alongside the government to reach this goal. The White House proposed several key initiatives focused on scaling up the production of SAF:

  1. A SAF tax credit that was included in the Build Back Better Agenda.
  2. Funding opportunities to support research and production of SAF projects including $3 billion in loan guarantees available for commercial-scale SAF projects, grant awards totaling more than $3.6 million to aid in evaluating the safety of new fuels, and over $61 million for projects to advance biofuels and support reduced cost of SAF pathways.
  3. Government use of public-private partnerships to support development and deployment of SAF.
  4. Fuel providers committed to increasing domestic SAF production using diverse fuel sources like wastes, fats, oils, grease, crop residue and woody biomass.

Overall, expanding SAF availability and maximizing SAF’s benefits requires extensive research and well-defined standards that give the aviation industry confidence to invest in producing SAFs, while also addressing key challenges and risks across the supply chain.

Build Back Better

If enacted, the Build Back Better bill would include several provisions concerning SAF as part of its Alternative Fuel and Low Emission Aviation Technology Program. The Secretary of Transportation would receive $1 billion to provide grants to projects including projects that produce, transport, blend, or store sustainable aviation fuels. In order to receive a grant, the Secretary of Transportation will look at several factors that center around economic impact, environmental benefits, job creation and infrastructure leverage. The bill also includes the Sustainable Aviation Fuel Credit, as discussed above.  The proposed tax credit would require at least a 50% reduction in lifecycle greenhouse gas emissions to receive at least a $1.25 per gallon credit and the incentive is increased for greater reductions. However, the additional incentives will not exceed $0.50, which equals to a maximum of $1.75. The effective date is slated to be January 1, 2023, but the Build Back Better bill is still in limbo.

Progress in Passenger and Cargo Airlines

SAF is already commercially available and regularly used on passenger flights. Currently, airlines are only permitted to use a maximum of 50% SAF in any engine. However, United received permission to operate the first 100% SAF-fueled commercial flight on December 1, 2021. The flight used 500 gallons of SAF in one engine and 500 gallons of jet fuel in the other. The flight carried 100 passengers and flew from Chicago’s O’Hare International Airport and landed in Washington, DC’s Reagan National Airport.

Passenger airlines have also pledged to increase the production and use of SAF. Major airline actions include:

  • United Airlines committed to purchasing 1.5 billion gallons of SAF over the next 20 years.
  • Delta Airlines committed to replace 10% of current jet fuel use with SAFs by 2030.
  • Southwest Airlines is partnering with the National Renewable Energy Lab to develop and commercialize SAF.
  • Amazon Air purchased 6 million gallons of SAF.
  • DHL Express pledged to use 30% SAF by 2030 and is partnering with other stakeholders on a demonstration project in Northern Kentucky to produce and supply SAF to the region.

The government will need to think of other ways to reduce the costs and increase availability of SAF because even with government incentives, SAF is not economically comparable to jet fuel. With this problem yet to be solved, the question remains, will we meet the 2050 zero-carbon goal?

For more information, read the White House Announcement.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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