White House, Congress Push Plans for Reducing Emissions from Aviation

The Biden Administration yesterday announced a new initiative to develop sustainable aviation fuels. In an extensive fact sheet released by the White House, the long-term goal of “a fully zero-carbon aviation sector by 2050” was announced.

The White House announcement was made in conjunction with Airlines for America, who announced yesterday their commitment to “work with government leaders and other stakeholders to make 3 billion gallons of cost-competitive sustainable aviation fuel (SAF) available to U.S. aircraft operators in 2030.” (This is a 50 percent increase from a 2 billion gallon in 2030 commitment the airlines made six months ago.)

A4A CEO Nick Calio said that government support was needed, “including a $1.50-$2.00 per gallon SAF blender’s tax credit; public-private SAF research, development and deployment programs, such as a new SAF and low emissions technology grant program under consideration by Congress; and other collaborative initiatives.”

That tax credit is in the works. The Biden Administration, as part of the tax plan in the 2022 budget, proposed a sustainable aviation fuel tax credit. The Treasury Green Book explains that “The proposal would introduce a production tax credit of $1.50 per gallon for sustainable aviation fuel that achieves at least a 50 percent reduction in emissions relative to conventional jet fuel. The credit would be offered for fuel produced after December 31, 2021 and before January 1, 2028. A supplementary credit of up to $0.25 per gallon would be available on a sliding scale depending on the emissions reduction relative to conventional jet fuel. The emissions reduction certification amount would be $0.01 for every two percentage points above the 50 percent reduction baseline. Sustainable aviation fuel with a 50 percent emissions reduction relative to conventional fuel would receive a $1.50 per gallon credit, while fuel with a 100 percent emissions reduction would receive a $1.75 per gallon credit.”

At the time, Treasury estimated that the tax credit would cost $6.6 billion over ten years. The Ways and Means Committee is expected to mark up the tax portion of the budget reconciliation bill early next week, and the sustainable aviation fuel tax credit may be part of that. (Sept 11 2021 addendum: At 10:22 p.m. last night, the Ways and Means Committee released the text of the green energy portions of its reconciliation submission, and the sustainable aviation fuel tax credit is indeed there, as section 136203.)

The White House fact sheet listed a host of initiatives being taken in all areas of the government to promote the switch to sustainable aviation fuels, but it centers around a memorandum of understanding (MOU) signed by the Energy, Transportation, and Agriculture Secretaries this week. The MOU announced that the three agencies are “launching a government-wide Sustainable Aviation Fuel Grand Challenge (the Grand Challenge) to reduce the cost, enhance the sustainability, and expand the production and use of Sustainable Aviation Fuel (SAF) that achieves a minimum of a 50% reduction in lifecycle greenhouse gas (GHG) compared to conventional fuel t meet a goal of supplying sufficient SAF to meet 100% of aviation fuel demand by 2050.”

The MOU, like all MOUs, delineated the responsibilities of the various parties:

While all this was going on at the White House, the committees of the U.S. House of Representatives were assembling their contributions to the $3.5-ish trillion budget reconciliation bill, and some of those dealt with aviation emissions.

  • Section 110011 of the Transportation and Infrastructure Committee’s draft reconciliation submission appropriates $1 billion “for the Department of Transportation to provide grants to, and enter into cost-sharing agreements with, eligible entities to carry out projects in the United States that (a) develop, demonstrate, or apply low-emission aviation technologies; or (2) produce, transport, blend, or store sustainable aviation fuels that would reduce greenhouse gas emissions…” The legislation would also appropriate $6 million to help fully implement ICAO’s Carbon Offsetting and Reduction Scheme for International Aviation plan.
  • The Science, Space and Technology Committee’s reconciliation submission appropriates $225 million for NASA’s aeronautics research for “advancing aeronautics research and development on sustainable aviation, including related administrative expenses, consistent with the responsibilities authorized under sections 40701 and 40702 of title 51, United States Code. The Administrator shall prioritize environmental sustainability, energy-efficiency, and the reduction of greenhouse gas emissions and environmental impacts in all efforts that use funding appropriated under this section.

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