BUILDING SAF CAPACITY
The 2022 Inflation Reduction Act did just that, particularly when it comes to building capacity. When the legislation was enacted, global SAF production was just a minuscule 26.4 million gallons a year—or about 0.1 percent of all aviation fuel. The half-decade-long tax provision, which took effect on January 1, 2023, allocates a $1.25-per-gallon tax credit for each gallon of SAF sold. SAF producers must demonstrate that the fuel can cut greenhouse gas (GHG) emissions by 50 percent as part of a qualified mix compared to regular types of jet fuel. That credit would last for two years, after which the Clean Fuel Production Credit would take over, providing a baseline credit for SAF until the end of 2027 unless the U.S. Congress extended it. Through the CFPC, fuel producers earn up to $1.75 per gallon for fuels with a 100 percent GHG reduction or less, based on emission volumes. With the incentives in play, it seems like it will only be a matter of time before SAF becomes more widely available at general aviation airports in the U.S.—more than 5,000—compared to just the roughly 500 airports supporting commercial airline traffic.
Incentives are a powerful thing. Aside from being a catalyst for the production, there is a broader social discourse wherein air travelers, and climate advocacy bodies, are scrutinizing their carbon footprint and urging both commercial and business operators to cut back. Production aside, business and commercial jet operators have leaned into the opportunity to test and adopt SAF for their flights through “book and claim” deals. Many airlines have made robust and multi-year SAF commitments and have entered into fuel delivery partnerships with fuel producers and refineries. Simultaneously, the business aviation community— often shamed for its high-visibility yet low-volume emissions—has rolled out various programs. During the October 2022 Business Aviation Convention & Exhibition, Ed Bolen, president and CEO of the National Business Aviation Association, reported that at the time, the business aviation community represented 8 percent of SAF deliveries despite being a fraction of a percent of total aviation fuel consumption.
Member companies from multiple disciplines must come together to produce, distribute, and utilize SAF.
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