U.S. fuel retailers are fighting the inclusion of a tax credit for sustainable aviation fuel (SAF) in Democrats’ $430 billion spending bill, arguing SAF is more carbon intense and less efficient than renewable diesel.
Lawmakers are offering a $1.25-$1.75 per gallon SAF credit depending on the feedstock used, as part of a tax and climate bill that aims to lower U.S. carbon emissions by about 40% by 2030 and cut the federal budget deficit by $300 billion.
The bill is expected to pass the Senate and move to the House with the SAF credit included next week. Democrats control the House and approval with the credit is expected.
Fuel retailers fear the credit would shift vegetable oil and other renewable feedstocks to aviation, leaving less of it for fuel producers that make renewable diesel.
The National Association of Truckstop Operators (NATSO) and SIGMA, a fuel marketers association, are urging lawmakers to oppose the Inflation Reduction Act of 2022 unless it provides tax parity between the biodiesel tax credit (BTC) and proposed SAF tax credit.