Sponsors (10)
The bill provides significant financial support and multi‑year certainty to qualifying SAF producers to accelerate lower‑carbon aviation fuels, but it reduces federal revenue and tends to favor larger, ASTM‑compliant producers while excluding some feedstocks and smaller competitors.
Producers of qualifying sustainable aviation fuel (SAF) receive a per‑gallon tax credit (up to $0.35 or $1.00), improving project economics and increasing revenues for SAF facilities.
SAF producers and investors gain longer policy certainty because the clean fuel production credit is extended for sales after December 31, 2033, supporting investment and project planning.
Passengers, communities, and the climate benefit because the credit incentivizes aviation fuels that meet ASTM standards and excludes palm‑derived or petroleum feedstocks, encouraging lower‑carbon SAF and potentially reducing aviation lifecycle emissions.
Taxpayers face reduced federal revenue because the per‑gallon credits lower IRS receipts, which could increase the federal deficit or crowd out other spending if not offset.
Smaller or less‑capitalized fuel producers may be disadvantaged because the relatively generous per‑gallon credit structure tends to favor larger producers, concentrating subsidies and possibly reducing competitive diversity in the industry.
Some feedstock or process types (e.g., palm‑derived or fuels that cannot meet ASTM specifications) are excluded, so certain producers and regions will be unable to access the credit and miss out on the policy’s economic incentives.
Based on analysis of 4 sections of legislative text.
Restores tiered per‑gallon production credits for sustainable aviation fuel, narrows eligible feedstocks, extends the sales-application date to 2033, and applies to fuel produced after Dec 31, 2025.
Introduced December 9, 2025 by Sharice Davids · Last progress December 9, 2025
Reinstates a special per‑gallon production credit for sustainable aviation fuel (SAF), restores two tiered rates (one low and one higher rate — the higher rate is ambiguous in the provided text), updates the SAF definition to require specified ASTM standards and exclude fuels derived from palm fatty acid distillates or petroleum, extends the clean fuel credit application date from sales after 2029 to sales after 2033, and makes the changes applicable to fuel produced after December 31, 2025. It also updates a conforming cross‑reference in the clean fuel credit rules to include the reinstated per‑gallon amounts. The change modifies Internal Revenue Code section 45Z and primarily affects SAF producers, fuel purchasers in the aviation sector, and federal tax revenues by restoring and extending targeted production incentives for SAF while excluding certain feedstocks (e.g., palm‑derived oils and petroleum). The text shows an inconsistency in the higher per‑gallon amount (listed both as $1.75 and $1.00), which creates ambiguity about the exact higher rate provided by the bill.