Introduction
As the aviation industry is facing mounting pressure to reduce carbon emissions, Sustainable Aviation Fuel (SAF) has emerged as a beacon of hope. With the U.S. Department of Treasury unveiling its tax credit generating schema for SAF, the stage is set for widespread adoption. Let’s delve into the world of SAF, its benefits, production, and government incentives.
Understanding SAF
SAF is a versatile fuel that can be blended with conventional jet fuel at various levels, typically between 10% and 50%. Over 360,000 commercial flights are already utilizing SAF; representing a significant growth in sustainable aviation fuel usage since 2021, and continued growth expected over the next few years due to the new tax incentive. The International Civil Aviation Organization (ICAO) aims to cap net CO2 aviation emissions at 2020 levels until 2035 and achieve net-zero carbon by 2050. SAF is poised to be a cornerstone in meeting these ambitious targets.
Benefits and Production
SAF is a compelling alternative to conventional jet fuel due to its significant environmental benefits and compatibility with existing aviation infrastructure. It can reduce greenhouse gas emissions by up to 94% compared to traditional fuels and can be produced from diverse, renewable feedstocks like food waste, woody biomass, and fats, oils, and greases, which are often readily available. Moreover, SAF can be seamlessly integrated into current fuel distribution systems without requiring modifications to aircraft or refueling infrastructure. These advantages make SAF an attractive option for fuel producers and the aviation industry, supporting a smoother transition to sustainable aviation practices.
Government Incentives and GREET Modeling
The U.S. Department of Treasury’s tax credit guidance for SAF production is a significant step forward towards promoting SAF. The Inflation Reduction Act (IRA) established the SAF tax credit to promote fuels reducing emissions by 50% compared to traditional petroleum-based jet fuel. The new guidance incorporates the Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model to determine greenhouse gas emissions. This new GREET model allows the following:
Corn ethanol and other food crop-based fuels can now qualify for credits.
Refiners can earn a credit of up to $1.75 per gallon for SAF production, based on emission reductions, compared to the $1.00 per gallon credit available for biodiesel blends.
Ethanol-based SAF is eligible for credits if corn farmers implement "climate smart agriculture" practices, which aims to balance emission reduction with agricultural sustainability.
Conclusion
As the aviation industry navigates the evolving regulatory landscape, the adoption and advancement of SAF is crucial for a sustainable future. Research and tax incentives are essential for SAF development and adoption, enabling it to play a pivotal role in achieving global sustainability goals. By engaging in the transition towards sustainable aviation practices, industry players can mitigate environmental impacts and contribute to broader sustainability objectives.
At Ashworth Leininger Group, we specialize in navigating complex regulatory landscapes, offering technical expertise in environmental sustainability programs including evaluation of compliance with California’s Low Carbon Fuel Standard (LCFS), Oregon’s Clean Fuel Program (CFP) among other similar programs designed to meet sustainability objectives. Contact us today to learn how we can help your organization stay ahead in the transition into sustainable fuels.
For additional information about our services, please contact:
Elliott Ripley Principal (805) 764-6004 eripley@algcorp.com
Irra Core, Ph.D. Principal (805) 764-6006 icore@algcorp.com