Illinois Passes Sustainable Aviation Fuel (SAF) Law

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by KnowESG
Picture of a passenger aircraft.

The Invest in Illinois Act has been signed into law by Governor JB Pritzker. This bill includes a credit for purchasing sustainable aviation fuel (SAF) and aims to make Illinois a leader in the production and use of SAF.

“The passage of the Sustainable Aviation Fuel Purchase Credit positions Illinois as a leader in the energy transition,” said LanzaJet CEO Jimmy Samartzis. “These types of incentives accelerate the development of this new industry as we work hard to decarbonise the transportation sector. LanzaJet is excited to play a role in bringing SAF to new consumers across Illinois. We encourage other states to support the sustainable fuels industry with similar measures and help meet the nation’s climate change goals.”

This legislation in Illinois provides a tax credit of $1.50 per gallon for SAF used by aircraft in the state. For the SAF to qualify for the credit, it must reduce carbon emissions by at least 50% throughout its life. The credit applies to all SAF used in Illinois, regardless of where it is produced. However, credits for SAF used before June 1, 2028, must come from renewable sources such as biomass, waste streams, renewable energy, or gaseous carbon oxides. The tax credit will be available until January 1, 2033.

The SAF Purchase Credit and the Inflation Reduction Act (IRA) legislation are significant developments for the domestic sustainable fuels industry in the United States.

The purchasing credit provides a tax credit of $1.50 per gallon for SAF used in Illinois, while the IRA includes a performance-based tax credit of up to $1.75 per gallon for SAF that achieves a 100% lifecycle reduction in carbon emissions. These incentives make sustainable fuel alternatives more accessible and affordable, which is a positive step forward in promoting the use of clean fuels in aviation. LanzaJet aims to support this effort by providing up to 1 billion gallons of SAF developed using its technology by 2030.

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Source: LanzaJet