Sustainable Skies Act would provide subsidies for SAF blending

In Washington, Congressman Brad Schneider (IL-10) introduced the Sustainable Skies Act, new legislation to fight carbon emissions and promote the transition to sustainable aviation fuel. The bill, co-led by Reps. Dan Kildee (MI-05) and Julia Brownley (CA-26), is supported at introduction by climate groups like the Environmental Defense Fund and the World Wildlife Fund, and by industry groups, like United Airlines, Airlines for America, LanzaJet, and the Airline Pilots Association. The bill is also supported by Third Way, the Rocky Mountain Institute, and the Progressive Policy Institute. Senator Sherrod Brown (D-OH) is expected to introduce a Senate companion bill in the coming days.

The legislation would create a tax credit starting at $1.50 per gallon for blenders that supply sustainable aviation fuel with a demonstrated 50% or greater lifecycle estimate reduction in greenhouse gas emissions compared to standard jet fuel. Eligible fuels would need to follow the sustainability criteria established by the International Civil Aviation Organization (ICAO) or methodology the bill requires the Environmental Protection Agency to determine is as stringent as ICAO’s. In order to incentivize innovation and greater reductions in greenhouse gas emissions, the legislation provides an additional credit of $0.01/gallon for each percentage the fuel reduces emissions over 50% — for instance, an SAF that reduces emissions by 70% would receive a credit of $1.70/gallon. The tax credit would expire at the end of 2031.

To ensure environmental integrity, the bill includes several safeguards. It excludes palm fatty acid distillates (PFAD) as an eligible feedstock due to its environmental record. The bill also would require eligible SAFs to utilize the full suite of ICAO sustainability criteria, including accounting for both aggregate attributional core lifecycle emissions and the induced land use change.