SAF Act
- Sponsor
- Rep. Davids, Sharice [D-KS-3]
- Committees
- Ways and Means Committee (primary)
- Last action
- Dec 9, 2025
Bottom line
The SAF Act aims to incentivize the production and use of sustainable aviation fuel by increasing tax credits and extending their availability, with the goal of accelerating the decarbonization of the aviation sector.
What it actually does
This bill amends the Internal Revenue Code of 1986 to significantly increase the clean fuel production tax credit rates specifically for sustainable aviation fuel (SAF) and extends the availability of this credit. It raises the credit from 20 cents to 35 cents per gallon for certain facilities and from $1.00 to $1.75 per gallon for others, while also extending the credit's sunset date from December 31, 2029, to December 31, 2033. The bill also specifies the standards for what qualifies as sustainable aviation fuel, explicitly excluding fuels derived from palm fatty acid distillates or petroleum.
Proponents argue
Supporters argue that increasing and extending the clean fuel production credit for sustainable aviation fuel is crucial for accelerating the development and adoption of lower-carbon aviation fuels. They contend that these incentives are necessary to make SAF economically competitive with traditional jet fuel, drive investment in production facilities, and help the aviation industry meet its ambitious emissions reduction targets. Proponents also highlight the environmental benefits of reducing aviation's carbon footprint and the potential for job creation in the domestic SAF industry.
Opponents contend
Critics might argue that tax credits for specific fuels can distort markets and may not be the most efficient way to achieve decarbonization goals, potentially leading to higher costs for taxpayers and consumers. Some may question the effectiveness of such credits in significantly shifting the market without broader regulatory changes or express concerns about the specific definition of 'sustainable' and whether it truly captures the full lifecycle emissions. Others might raise concerns about the potential for these credits to benefit large corporations disproportionately or to divert resources from other climate solutions.
The bill is very short and directly amends specific sections of the tax code, making it highly accessible for a reader to understand its core provisions quickly.
Section 2(a)(1), amending Section 45Z(a)(3) of the Internal Revenue Code of 1986.
Enhanced Clean Fuel Production Credit for Sustainable Aviation Fuel
This provision significantly increases the tax credit rates for the production of sustainable aviation fuel (SAF). Specifically, it raises the credit from 20 cents to 35 cents per gallon for fuel produced at certain qualified facilities and from $1.00 to $1.75 per gallon for fuel produced at other types of qualified facilities. It also defines sustainable aviation fuel by requiring it to meet specific ASTM International Standards (D7566 or D1655, Annex A1) and explicitly prohibits it from being derived from palm fatty acid distillates or petroleum.
Supporters argue
Supporters argue that these enhanced credit rates are essential to bridge the cost gap between conventional jet fuel and SAF, which is currently more expensive to produce. They contend that higher incentives will stimulate investment in SAF production capacity, accelerate technological advancements, and make SAF more competitive, thereby driving its adoption and significantly contributing to the decarbonization of the aviation sector. The exclusion of palm fatty acid distillates addresses environmental concerns related to deforestation.
Critics contend
Critics might argue that such significant tax credit increases could lead to substantial federal revenue losses without guaranteeing a proportional increase in SAF production or adoption, especially if other market barriers persist. They may also contend that the specific ASTM standards, while important, might still allow for fuels with questionable sustainability profiles or that the exclusion of certain feedstocks might limit supply unnecessarily.
Tradeoffs
The provision balances the desire to rapidly scale SAF production and reduce aviation emissions against the fiscal cost of increased tax credits and the potential for market distortions. There's also a tension in defining 'sustainable' to ensure genuine environmental benefits while allowing for sufficient feedstock diversity.
Section 2(b), amending Section 45Z(g) of the Internal Revenue Code of 1986.
Extension of Clean Fuel Production Credit Eligibility
This provision extends the eligibility period for the clean fuel production credit. It changes the sunset date for the credit from fuel sold after December 31, 2029, to fuel sold after December 31, 2033. This provides an additional four years of tax credit availability for producers of qualifying clean fuels, including sustainable aviation fuel.