Introduction

The US government has enacted initiatives to support the domestic sustainable aviation fuel (SAF) market to address aviation’s climate impacts. With one of the world’s most extensive aviation networks, the US aims to reduce greenhouse gas (GHG) emissions from aviation, which represented 11% of US transportation-related emissions in 2021.

Regulatory landscape

The US regulatory framework for SAF is more favourable towards bio-based SAFs, especially those using crop feedstock, compared to the UK and EU. The Biden administration supports the domestic SAF market through measures like tax credits and subsidies. The SAF Grand Challenge, launched in 2021, aims to produce 3 billion gallons of SAF by 2030 and 35 billion gallons by 2050.

Comparative analysis

US SAF policies prioritise subsidies and tax credits, making the landscape more accommodating to biomass-based fuels, particularly from corn or sugarcane, which are restricted in the EU and UK. The US has a theoretical SAF production potential of 21.7 billion gallons from biomass, with 12.2 billion gallons sustainably available.

Inflation Reduction Act

The Inflation Reduction Act (IRA) significantly impacts the US SAF market by providing comprehensive support, including the SAF-blenders tax credit. This credit offers $1.25 per gallon for SAF blends achieving at least a 50% reduction in GHG emissions, with additional credits based on higher reductions.

Renewable Fuel Standard

The Renewable Fuel Standard (RFS) includes provisions for advanced biofuels, supporting SAF production through market incentives. In 2023, the Environmental Protection Agency (EPA) revised the RFS, increasing biofuel volume targets, further promoting SAF investment.

State-level initiatives

Independent US states like California, Oregon, and Washington have their own SAF programmes, which include credits for SAF production. Notable projects like Project Roadrunner in Texas aim to convert waste carbon dioxide and renewable power into SAF and other low-carbon fuels.

Financial mechanisms

Several funding, tax credit, and subsidy schemes support the SAF market, including:

• Biomass Crop Assistance Programme (BCAP)
• Rural Energy for America Programme (REAP)
• Biofuel Producer Tax Credit
• SAF Blender’s Tax Credit
• Clean Fuel Production Credit (effective 2025-27)
• Federal procurement initiatives by the Department of Defence and NASA

Research and development

The FAA supports SAF testing and analysis through programmes like the Aviation Sustainability Center (ASCENT) and the Continuous Lower Energy, Emissions, and Noise (CLEEN) programme. The Commercial Aviation Alternative Fuels Initiative (CAAFI) promotes SAF development through collaborations.

Further analysis

InfluenceMap, ICCT, Rocky Mountains Institute, and World Resources Institute have provided extensive analysis of the US SAF policy landscape and industry responses. Their findings highlight the need for harmonised policies and the potential of SAF to address aviation’s climate impact.

Recommendations

The report recommends:

• Continued support for SAF through subsidies and tax credits
• Harmonisation of SAF policies across countries
• Investment in research and development for advanced SAF technologies
• Encouragement of state-level initiatives to promote SAF production and use

Conclusion

The US SAF policy landscape is robust, with significant government support through various mechanisms. The comparative advantage over the EU and UK lies in the favourable regulatory framework for bio-based SAFs. Continued investment and policy support are crucial for scaling SAF production and addressing the aviation sector’s climate impact.