The sustainable aviation fuel (SAF) blenders tax credit was proposed under the Biden Administration’s 2022 Inflation Reduction Act and is under the remit of the Internal Revenue Service (IRS). Starting in 2023, the SAF-blenders tax credit will award airlines blending SAFs with jet fuel with a monetary credit. To achieve the credit ($1.25/gallon) SAFs must achieve a 50% reduction in greenhouse gas emissions compared to conventional jet fuel. Fuels achieving GHG emissions reductions exceeding the 50% threshold will receive greater tax credits up to $1.75/gallon, incentivizing fuels with lower emissions.
To determine whether a fuel meets the 50% threshold for the SAF blenders tax credit, a fuel’s GHG emissions must be estimated as accurately as possible. However, emissions from land-based fuels (biofuels) cannot be measured directly but are estimated through models that simulate how agricultural systems react to increased fuel demand and changes in land-use.
The UN body for aviation, the International Civil Aviation Organization, (ICAO) devised a methodology for estimating fuel emissions under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). The proposed methodology for calculating a fuel’s emissions under the SAF blenders tax credits is ICAO’s CORSIA methodology, or “any similar methodology”.
The Greenhouse Gases, Regulated Emissions and Energy Use in Technologies (GREET) methodology is an alternative methodology used for calculating fuel emissions. GREET often produces widely divergent results to ICAO’s CORSIA methodology, as agricultural systems are assumed to have more optimistic responses to biofuel growth under some models in GREET.
The consequence of these optimistic assumptions is that GREET estimates far smaller emissions from SAFs derived from corn ethanol compared to estimations by ICAO’s CORSIA methodology. In fact, ICAO’s CORSIA methodology finds that corn ethanol’s emissions are almost equal to fossil jet fuel. Lower estimations of a fuel's emissions may meet policy thresholds and translate to larger tax credits under federal policy, incentivizing the fuels. However, these assumptions are more likely to underestimate GHG emissions from fuel production.
ICAO’s CORSIA methodology also sets additional sustainability criteria, including land use rights, food security, biodiversity and water, to prevent negative trade-offs commonly associated with biofuels. ICAO and the Intergovernmental Panel on Climate Change have warned against the expanded use of crop-based biofuels, as it risks converting natural lands to croplands with resulting GHG emissions.
See InfluenceMap’s July 2023 US Sustainable Aviation Fuel (SAF) Policies and Corporate Engagement report for further details on fuel emissions calculations and the advocacy of the aviation and biofuel industries.
While the SAF blenders tax credit came into effect in January 2023, implementation of the credit is still being reviewed by the Internal Revenue Service (IRS). The primary issue in current policy debates appears to be the methodology for calculating fuel emissions. In December 2023, the IRS issued guidance determining that the current GREET methodology does not “satisfy the applicable statutory requirements for the SAF credit” and stating that an updated GREET model will be developed in 2024. In April 2024, the updated GREET model was released, alongside guidance on the use of climate-friendly agricultural practices. The guidance stated that corn-ethanol derived SAFs can reduce estimated emissions if producers use three agricultural practices in conjunction: no-till, cover cropping and efficient fertilizer application. Soybean-derived SAFs can reduce estimated emissions if producers use a combination of no-till and cover cropping.
Passed: Undergoing implementation by the Internal Revenue Service.
In April 2024, the Biden Administration released its updated ‘GREET’ model and guidance on the use of climate-friendly agricultural techniques.
Passed: Undergoing implementation by the Internal Revenue Service.
In April 2024, the Biden Administration released its updated ‘GREET’ model and guidance on the use of climate-friendly agricultural techniques.
The following table lists companies and industry associations that have engaged on the SAF blenders tax credit. Click on an entity name to view the full profile on its climate policy engagement.
| Influencemap Performance Band | Organization | Engagement Intensity |
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