Airplanes are running on sustainable aviation fuel right now, and they want more of it!
Geoff Cooper, CEO of the Renewable Fuels Association, says he wants to see a clear path forward on tax credits for Sustainable Aviation Fuel production. In order to make that happen, RFA needs some updates from the federal government, particularly when it comes to 45Z.
“45Z is a tax credit that goes to the producer of a clean fuel,” he says. “To qualify for the tax credit, you have to be producing a fuel that reduces greenhouse gas emissions by at least 50 percent. As that greenhouse gas reduction increases, the value of the tax credit increases. For sustainable aviation fuel in particular, it has a higher value. So if a SAF producer is making aviation fuel that is net-zero emissions or a 100 percent greenhouse gas reduction, that’s worth a $1.75 a gallon to that producer.”
RFA wants Congress to give 45Z a longer shelf life — it’s set to expire in 2027 — so that the U.S. Treasury can make the ruling giving tax credits to SAF producers.
“We don’t have final rules on 45Z. All we have today is a ‘notice of intent’ to propose regulations from the U.S. Treasury, and that’s not enough for the industry to hang its hat on and make these huge investments, which are often hundreds of millions of dollars,” Cooper says. “So, we’re waiting for the Treasury to follow through with the next steps in that process, which would be a formal proposal and then ultimately a final rule.”
Cooper adds that RFA believes the final 45Z regulations must recognize the realities of today’s biorefining and agriculture sectors and the complexities of the transportation fuels marketplace. At the same time, final regulations must maintain an intuitive and manageable approach to registration, reporting, and recordkeeping that creates the kind of dependable value that empowers businesses to invest.
He tells the Mid-West Farm Report that RFA has a champion in the Trump administration – Agriculture Secretary Brooke Rollins has been a biofuel advocate, and President Trump himself has been a vocal proponent of ethanol.
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