Global air travel now exceeds pre-pandemic levels and could likely grow an additional 30 percent before the end of the decade. In response to growing demand and rising emissions, global economies across Europe and Asia are looking to gain a foothold in the market for “sustainable aviation fuel”, an industry term for jet fuel produced using non-petroleum feedstocks. As international competition for those feedstocks increases, the United States could be well-positioned to leverage its energy, technology, and agricultural might to scale its own domestic supply chains and bring new fuel production methods to market.  

The value proposition of American SAF is three-fold: its total lifecycle emissions are lower than fossil-derived jet fuel, it can be produced domestically, and it is certified for use in today’s aircraft. There is also strength in its diversity. Early production has mostly come from traditional biofuel pathways using waste products like used cooking oil and tallow. As advanced production methods are pushed from the lab to commercialization, SAF produced from hydrogen, carbon dioxide, ethanol and other feedstocks will scale into a resilient domestic fuel market.  

However, the competitiveness of the American SAF industry is not guaranteed. The high costs of early-stage feedstock and technology development, pricing challenges, and electric grid and  upstream infrastructure gaps (e.g., refining, blending, and transportation) are barriers characteristic of this early market. Congress and the Administration can seize this opportunity by providing technology-neutral support for American energy innovators.   

The Center for Climate and Energy Solutions (C2ES) established the Sustainable Aviation Fuel Technology Working Group as a venue to address these challenges. The group convenes leading experts across the aviation ecosystem — fuel and energy producers, technology developers, transportation infrastructure and logistics experts, investors, airlines, and members of C2ES’s Business Environmental Leadership Council (BELC) — to unpack how the sector navigates dynamic technology, market, and regulatory challenges. Informed by working group discussions, C2ES has produced the following shortlist of specific actions the federal government can take to help unlock widespread adoption of a diverse, low-carbon fuel mix in the aviation sector. The recommendations fall into four categories: tax credits, market-based credits, financing, and carbon pricing.  

1. Congress should extend production-based tax credits, inclusive of a floor price, to cover at least 10 years from when a SAF production facility is placed in service.  To unlock private capital in support of local economies and innovative energy infrastructure, tax credits must accommodate the timelines required to plan, finance, permit, and construct new facilities. The short duration of existing tax credits does not align with the realities of technology and project development. A credit extension and floor value for qualifying SAF enables more predictable returns on investment.
2. The Renewable Fuel Standard (RFS) should be updated to ensure the eligibility of e-SAF as a renewable fuel and allow producers to account for lifecycle emissions reductions from the deployment of carbon capture technology. The implementation of these updates would improve the fitness of the RFS to properly accommodate and fairly credit the production of new SAF technologies in the absence of a technology-neutral Clean Fuel Standard.
3. Congress should provide additional funding and support to first-of-a-kind and demonstration SAF production facilities to accelerate the commercialization of advanced SAF pathways.In doing so, Congress should provide annual funding to the Fueling Aviation’s Sustainable Transition discretionary grant program (FAST-SAF) and provide additional resources to the Department of Energy (DOE) in support of grants under the Bioenergy Technologies Office (BETO). A SAF-specific funding pool should be created for SAF-related loans and loan guarantees under the agency’s Loan Programs Office (LPO).
4.  The administration and Congress should examine options and work towards enacting an economy-wide market-based carbon pricing program that would contribute to the achievement of net-zero emissions by 2050. Separately, Congress should confer to the U.S. Department of Transportation the authority to implement the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) in the United States to require that U.S. airline operators monitor and report international aviation emissions under the FAA CORSIA Monitoring, Reporting, and Verification (MRV) Program and compensate for their emissions growth as required under the CORSIA program.Continuous improvement of existing programs and thoughtful additions of new initiatives will be essential for the United States to adopt a diverse, low-carbon fuel mix in its aviation sector. These efforts are also vital for maintaining the nation’s competitive edge in the emerging global SAF market. These policy recommendations were developed through discussions with stakeholders across the SAF ecosystem and offer a potential path forward in the pursuit of this objective. 

To explore the full report, Sustainable Aviation Fuel: Policy Recommendations to Enable a low-Carbon Fuel Mix, developed in consultation with more than 35 companies across the SAF ecosystem, please click here, and find the fact sheet here.