U.S. bipartisan bill aims to revitalise sustainability incentives for aviation fuel production

A bipartisan bill introduced in the U.S. House of Representatives on 9 December 2025 seeks to restore a targeted tax incentive for sustainable aviation fuel (SAF) producers and extend the broader clean fuels credit, measures backers say are necessary to scale domestic SAF production and decarbonise aviation supply chains.

The Securing America’s Fuels (SAF) Act, led by Representatives Sharice Davids (D‑KS) and Mike Flood (R‑NE), would reinstate an SAF‑specific bonus within the Section 45Z Clean Fuel Production Tax Credit and extend the 45Z credit for all qualifying clean fuels through 2033. According to the original report, the bill would allow qualifying SAF producers to claim an additional payment of up to $0.35 per gallon or $1.75 per gallon for facilities that meet wage and apprenticeship requirements. The proposal has attracted support from a broad coalition of industry and agricultural groups that see the change as central to stimulating investment and creating new markets for feedstocks.

“Investing in sustainable aviation fuel isn’t just good for the environment , it’s good for Kansas farmers, our communities, and our economy,” said Sharice Davids in a statement announcing the bill. “The SAF Act ensures that clean fuel production incentives are strong and long‑term so businesses, farmers, and innovators can plan for the future with confidence. The bipartisan support shows the incredible potential we have to build a healthier, stronger, and more prosperous future for generations to come.” The bill’s legislative text and sponsor materials were distributed via Representative Davids’ office on 9 December 2025.

Industry groups have echoed that message. “Restoring the full credit provides the clarity and stability needed to unlock investment, expand supply and accelerate progress toward our industry’s long‑term environmental commitments,” said Ed Bolen, president and CEO of the National Business Aviation Association, thanking Reps. Flood and Davids for introducing the measure. The National Air Transportation Association also voiced support; NATA President and CEO Curt Castagna described SAF as “a significant opportunity for the agricultural, energy, and aviation sectors,” urging Congress to pass the legislation promptly.

Proponents point to both climate and economic rationales. Industry data shows SAF made from bio‑based feedstocks can reduce lifecycle greenhouse gas emissions by as much as 80% compared with conventional jet fuel, a figure cited by the National Business Aviation Association. Supporters argue that a reinstated bonus credit would make SAF projects financially viable, encourage farmers to supply domestic feedstocks, and secure jobs in rural communities; agricultural groups including state soybean and corn associations and several farm bureaus are listed among the bill’s backers.

The policy change follows earlier federal action. The U.S. Department of the Treasury and the Internal Revenue Service issued guidance on the 45Z Clean Fuel Production Credit on 10 January 2025, defining eligible fuels, facility qualifications, and confirming that producers can claim the credit. The IRS page on the Clean Fuel Production Credit notes that producers must register and calculate credit amounts based on lifecycle emissions factors, and that the 45Z framework replaced the prior 40B mechanism from 2025. Independent market analysis published this year also summarised 45Z’s two price tiers , the base rate of $0.35 per gallon and the $1.75 per gallon enhanced rate for projects satisfying prevailing wage and apprenticeship requirements , underlining the importance of wage standards to qualify for the higher credit.

But the proposal is not without critics. Environmental advocates and some analysts have warned that the 45Z design risks directing public subsidies to conventional biofuels with modest climate benefits. The Clean Air Task Force has argued that generous credits may constitute “unjustified giveaways” to established biofuels producers and said that the elimination of a dedicated SAF uplift in earlier 45Z language hindered SAF economics, potentially excluding many SAF producers from meaningful support. Those critics call for the credit to be recalibrated to favour lower‑carbon, innovative fuels and feedstocks rather than broadly subsidising incumbent biofuels sectors.

The SAF Act’s sponsors and supporters frame the change as correcting that competitive mismatch. Industry advocates say restoring the SAF bonus will re‑open investment pathways closed by the shift in 45Z’s design and provide the multi‑year certainty needed to finance refinery conversions, feedstock supply chains and workforce development. “It is crucial that Congress finds ways to support farmers with good domestic policy, at this time when international trade negotiations have left farmers in difficult market conditions,” said Richard Fotenot, president of the Louisiana Farm Bureau, describing the bill as delivering consistency to domestic aviation fuel markets “in a sustainable manner important to consumers.”

For corporate financiers, project developers and decarbonisation strategists, the legislative timetable will be decisive. The current proposal extends the 45Z credit to 2033, but change requires enactment by Congress and signature by the president. In the interim, Treasury and IRS guidance issued in January 2025 remains the controlling interpretation of 45Z eligibility and timing; it covers fuels produced after 2024 and sold before 2028 for qualifying purposes, meaning some investment decisions must reconcile existing rules with the uncertain prospect of retrospective or prospective legislative adjustments.

State‑level policy also continues to shape market conditions. Analyses of SAF project economics note that California’s Low Carbon Fuel Standard and Washington State’s Clean Fuels Standard provide separate compliance values for low‑carbon fuels that can be stacked with federal incentives in some structures, improving project returns. Market research published in 2025 documents that the combined policy environment , federal credit levels, prevailing wage thresholds, and state carbon programmes , will determine which SAF pathways are financially viable.

The SAF Act represents a clear attempt by lawmakers and stakeholders to preserve and extend a targeted financial signal for SAF amid broader reshaping of U.S. clean fuels policy. Its passage would tilt public support back toward SAF production, according to supporters; opponents urge tighter targeting to ensure public funds drive genuine lifecycle emissions reductions and innovation. For those in industrial decarbonisation and aviation fuels markets, the bill’s fate will materially influence investment sizing, feedstock strategies and the timeline for scaling SAF as a decarbonisation lever for aviation.