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The outlook for SAF is about to change dramatically due to the adoption of groundbreaking legislation in the USA and in the EU (forthcoming). Those two regions are leading the way, using two very different approaches. The U.S. focuses on driving down the costs of SAF to boost supply whereas the EU takes a more holistic regulatory approach with clear industry targets, blending mandates and the inclusion of aviation in the European Emissions Trading System (ETS), among others.

This section provides an overview of existing and upcoming legislation. It also includes a summary of significant voluntary commitments made over the past year and which are expected to impact the uptake of SAF going forward.

  • In the USA, the Biden administration has set a non-binding target of 3bn gallons of SAF produced yearly by 2030. The Inflation Reduction Act (adopted in August 2022) allocates USD 297m over five years to support this objective. Between 2023-2024, fuel producers will be able to claim a USD 1.25 tax credit per gallon for bio-based SAF, offering a lifecycle GHG emissions reduction percentage of at least 50% compared to conventional fuel - and up to USD 1.75 for a 100% reduction. Then, the Clean Fuel Production Credit kicks in until 2027. Using a more complex methodology, it rewards cleaner fuels with higher credits ranging from USD 0.35 to USD 1.75 per gallon. This federal tax incentive is stackable with credits offered in specific states. Note that there is no SAF blending mandate in the US.
  • The EU is about to adopt a comprehensive legislative package (“Fit-for-55”), including ambitious blending mandates for fuel suppliers and emission caps for aviation. Expected to be finalized in early 2023, the ReFuelEU Aviation introduces a 2% SAF objective in 2025 that gradually increases to 63% by 2050 (as per the Commission proposal). A sub-mandate for synthetic jet fuel will complement these targets.
  • In the past couple of years, all major aviation players, including powerful branch organizations like IATA and ICAO, have committed to Net Zero emission targets by 2050 – with SAF as the main pathway to reach this. 
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The Biden Administration has high ambitions when it comes to SAF. In September 2021, the Administration launched the “Sustainable Aviation Fuel Grand Challenge” to increase the production of SAF to at least 3bn gallons per year by 2030. It then took a year to negotiate the necessary funds to enable this revolution and in August 2022, Congress adopted the Inflation Reduction Act (IRA) containing two consecutive tax credit schemes for SAF:

  • 2023-2024 (section 40B of the tax code): The bill creates a blender’s tax credit (BTC) starting at USD 1.25 per gallon for blenders that supply SAF with 50% or greater lifecycle emissions reductions compared to conventional jet fuel. Fuels that beat the minimum threshold are eligible for an additional USD 0.01 per gallon credit for each percentage point of emissions reductions over 50% (so up to USD 1.75/gal of SAF).
  • 2025-2027 (section 45Z): The Clean Fuel Production Credit is technology-agnostic, and the amount of the credit depends on its GHG-emission reduction potential as established by the GREET lifecycle analysis (LCA) model. The lower a fuel’s carbon intensity (CI) score, the higher the potential credit: the tax credit’s full amount is equal to the base credit (USD 1.75/gal) multiplied by the emissions factor. Fuels must have a lifecycle emission level of less than 50kg of CO2eq per MMBtu to receive the credit.

The credit can be used to offset excise tax liability or as a direct payment in the event of insufficient excise tax liability. Further requirements need to be met to benefit from the tax credit – see Appendix 1 for details.

The tax credits for SAF introduced by the IRA will replace the current BTC credit (1 USD/gallon) and can be stacked with Renewable Fuel Standard40 (RFS) credits (Renewable Identification Numbers - RIN) and Low Carbon Fuel Standard (LCFS) credits in specific states (California, Oregon, and Washington state – see below). See Annex 2 for further details on relevant tax incentives offered in the USA at federal and state level for the production of renewable fuel.

The California Low Carbon Fuel Standard (CA-LCFS) was established in 2009 to reduce GHG emissions in the transportation sector. The policy framework applies a system carbon intensity reduction to put a value on carbon reduction generated from renewable fuels. The regulation was updated in 2019 to recognize SAF as an eligible fuel to generate credits. These credits can incentivize SAF production as they can then be sold to other obligated parties under the CA-LCFS. The GHG benefits of SAF are quantified through lifecycle assessment modeling that calculates the avoided emissions compared with conventional jet fuel. Note that the California Air Resources Board modified the GREET model and made it their own (CA-GREET) for GHG calculations.

Oregon’s Clean Fuels Program (CFP) is a market-based program introduced in 2016 and managed by the state’s Department of Environmental Quality Commission (DEQ). It focuses on achieving a 37% reduction in the carbon intensity (CI) of transportation fuels used in Oregon by 2035. The 2015 baseline year for the program represents 10% ethanol blended with gasoline and 5% biodiesel blended with diesel. DEQ requires fuel providers to show that the volume and type of fuel they supply for use in Oregon meets the carbon intensity level, or standard, for that year. DEQ gradually lowers the amount of carbon intensity in fuel allowed each year to meet the annual reduction goal. Businesses that create fuels that are cleaner than the annual limit generate credits, while higher carbon intensity fuels create deficits. Credits and deficits are measured in metric tons of greenhouse gas emissions.

In 2021, the Washington Legislature passed the Clean Fuel Standard with the objective to cut statewide emissions from transportation. From January 2023, the new Clean Fuels Program uses a market approach to incentivize fuel producers to reduce the “carbon intensity” of their products by 20% below 2017 levels by 2034. The requirement to reduce carbon intensity increases over time, making sure all transportation fuels decrease their emissions.  

In January 2023, the General Assembly of Illinois adopted a new SAF tax for every gallon of SAF sold to or used by an air carrier in Illinois from 1 June 2023 to 1 June 2033. Starting in June 2028, the state tax credit will only apply to SAF derived from domestic feedstocks. Airlines in Illinois will be able to claim the SAF tax credit up to a set quota dependent on the amount they spend on domestic conventional jet fuel that year. They can also combine the Illinois credit with the USD 1.25-1.75/USG credit under the federal Inflation Reduction Act. The credit only applies for SAF used in domestic flights, since airlines do not pay taxes on jet fuel used for international flights.


To ensure that the EU cuts its CO2 emissions by 55% in 2030 (compared with 1990 levels), the European Commission, Parliament, and Council are currently negotiating a comprehensive legislative package called “Fit-for-55”. Three pieces will impact the decarbonization of aviation in particular:  

Since 2012, the EU ETS covers CO2 emissions from intra-EU flights, meaning that airlines receive or buy emission allowances for their operations. The ETS provides an incentive to aircraft operators to use SAF that complies with the sustainability criteria by attributing them zero emissions under the scheme – reducing the number of ETS allowances they need to buy overall. In December 2022, the European Parliament and Council reached an agreement for a substantial revision of the ETS. They will also need to approve the final policy, which will then be published in the EU Official Journal.

In short, the provisional agreement foresees:

  • Phasing out free aviation emission allowances, gradually starting in 2024 and completely by 2026
  • Reserving 20m free allowances to incentivize the uptake of SAF
  • That airlines will have to disclose their non-CO2 effects on climate from 2025
  • That flights traveling to or from outside of the European Economic Area (EEA) will be covered by the United Nation’s CORSIA (but flights to countries where CORSIA does not apply will also fall under the scope of the ETS from 2027)

The ReFuelEU Aviation proposal presented by the Commission in July 2021 aims to introduce a blending obligation for fuel suppliers:

  • Starting in 2025, the aviation fuel made available to EU airports should contain 2% SAF, increasing to 5% by 2030, 32% by 2040 and 63% by 2050. What qualifies as SAF is a point of negotiation.
  • To provide the necessary level of market certainty for synthetic aviation fuels (also referred to as eKerosene), the Commission proposes a sub-mandate for synthetic aviation fuel, starting at 0.7% in 2030, increasing to 8% in 2040 and 28% in 2050.
  • The other SAF volumes will need to be produced from feedstocks listed in Parts A and B of RED II Annex IX. This means that effectively there will be two mandates: one for advanced biofuels and one for synthetic aviation fuels.
  • To tackle fuel tankering practices, the draft regulation establishes the obligation for aircraft operators to ensure that the yearly quantity of aviation fuel uplifted at a given EU airport is at least 90% of the yearly aviation fuel required.
  • The legislative proposal is also linked to reporting obligations for aircraft operators to the European Union Aviation Safety Agency. To avoid double-counting emission reductions, airlines may only claim the benefits of one batch of SAF once: under the EU ETS for intra-EU flights or under CORSIA for extra-EU flights.

As a part of ordinary legislative procedure, the Council of the European Union and the European Parliament assessed the proposal and suggested amendments, which were released in June and July 202241, respectively. Appendix 3 presents the different proposals for blending mandates.  

There are further areas of disagreement such as transition periods or what would qualify as SAF; you can find a summary in this brief.

Once adopted, most probably in Q1 2023, the ReFuelEU Aviation regulation will be applicable throughout the EU – contrary to a Directive, it will not need to be translated into national laws.

A key element in the "Fit for 55" package is the revision of the Renewable Energy Directive (RED II), to help the EU deliver the new 55 % GHG target by increasing the share of renewable energy sources in the final energy consumption of the EU. This includes setting the rules on how renewable fuels of non-biological origin (RFNBO) – including eJet fuel – can be produced and accounted for. Adopted in 2018, the Directive had tasked the Commission to prepare two delegated acts to do so – see Appendix 4 for details.  

In September 2022, the European Parliament voted its position on RED II and raised the share of RFNBOs in all fuels to 5.7% by 2030. If accepted by the Council and the Commission, this target would trump the levels proposed in the ReFuelEU Aviation text. At the same time, the European Parliament scrapped the legal basis for the first delegated act, which would have provided a clear framework by the end of 2022, directly applicable across the EU27. This could be particularly problematic for renewable hydrogen producers, who could be facing a long drawn-out process to transpose a Directive into 27 sets of national law.

Several individual European countries have not waited for lengthy EU procedures to introduce SAF obligations. Appendix 5 provides a short list of examples.  


In the past couple of years, we have seen a flurry of voluntary commitments supporting the uptake of SAF:

  • IATA commits to net-zero by 2050: The International Air Transport Association – representing 290 airlines, equivalent to 83% of total air traffic – approved a combination of measures to reach carbon neutrality by 2050. The most significant of them is the use of SAF, and IATA projects an increase in SAF production from 2% of total fuel requirement (7.9bn liters) in 2025 to 65% (449bn liters) in 2050.
  • ICAO Members states commit to net zero by 2050: In October 2022, 184 States and 57 organizations adopted a collective long-term aspirational goal of reaching Net Zero emissions in 2050. A new program called ICAO Assistance, Capacity-building and Training for Sustainable Aviation Fuels (ACT-SAF) was launched in support of that goal with the aim of accelerating the availability and use of SAF. A third ICAO Conference on Aviation and Alternative Fuels will be convened in 2023.
  • The Clean Skies for Tomorrow coalition: Launched in 2019 by the World Economic Forum, The CST coalition aims to scale SAF as the most promising option to reduce the aviation industry’s carbon emissions in the near term. It brings together critical players in the field of aviation, from aircraft builders (Boeing, Airbus) to Airlines (KLM) and airports (Heathrow, Schiphol).

Appendix 6 lists individual airline announcements in the past few years.