US Senate passes major climate, sustainable aviation fuels legislation

The US Senate passed the Inflation Reduction Act, 51-50, after Vice President Kamala Harris provided the tie-breaking vote. The bill contains five years of dedicated Sustainable Aviation Fuel tax provisions aimed at incentivizing production of the renewable jet fuel.

The climate, healthcare and tax package now will move to the US House of Representatives, and the House is expected to take up the legislation on Friday. The voting was on a party-line basis, and the final hours were marked by tense negotiations with Senator Kyrsten Sinema as well as a flock of amendments. Senate Republicans did, with some Democratic support, strip out some health care provisions — but the climate package elements remained in place.

Originally, a dedicated SAF Blender’s Tax Credit to stimulate investment in the nascent industry and provide economic parity with other renewable fuels emerged in the Sustainable Skies Act introduced in 2021. A coalition of industry stakeholders worked to bring two years of such tax credits into the Inflation Reduction Act of 2022, valued at $1.25-$1.75 per gallon depending on percentage of lifecycle greenhouse gas emissions compared to fossil-based jet fuel. Beginning in 2025, the legislation creates three years of a Clean Fuel Production Credit with an enhanced value for SAF of up to $1.75 per gallon.