Regulatory Change | SAF Tax Policy | February 2026
Last Updated: February 10, 2026 | Sources: US Senate Press Releases, NBAA, SAF Coalition — February 2026
Quick Summary
On February 4, 2026, a bipartisan group of US Senators introduced the Securing America’s Fuels Act, legislation designed to reinstate the sustainable aviation fuel (SAF) bonus credit under the Section 45Z Clean Fuel Production Tax Credit — and extend the full credit through 2033.
The SAF-specific bonus was eliminated by the “One Big Beautiful Bill” in 2025, which extended the 45Z credit for all clean fuels but removed the aviation-specific tier. The bill directly affects SAF producers, airlines, agricultural feedstock suppliers, and fuel investors. It currently awaits Senate committee action.
Quick Facts
| Item | Details |
|---|---|
| Legislation | Securing America’s Fuels Act |
| Introduced | February 4, 2026 |
| Lead Sponsors | Sens. Jerry Moran (R-KS), Amy Klobuchar (D-MN), Joni Ernst (R-IA), Catherine Cortez Masto (D-NV) |
| House Companion | Introduced in 2025 by Reps. Mike Flood (R-NE) and Sharice Davids (D-KS) |
| SAF Bonus Credit Reinstated | Up to $0.35–$1.75 per gallon (based on carbon intensity) |
| 45Z Credit Extension | Through December 31, 2033 |
| Current Status | Introduced in Senate — awaiting committee action |
| Applies To | SAF producers, airlines, agricultural feedstock suppliers, fuel investors |
| Industry Support | NBAA, SAF Coalition, Airlines for America, Gevo, agricultural groups |
What Changed
The Section 45Z Clean Fuel Production Tax Credit was introduced under the Inflation Reduction Act, replacing the earlier Section 40B SAF blender’s credit. When Congress passed the “One Big Beautiful Bill” in 2025, it extended the 45Z credit for all clean fuels — but eliminated the SAF-specific bonus tier.
Before the 2025 change, the SAF bonus under 45Z allowed qualifying producers to receive:
- $0.35 per gallon for SAF meeting the baseline carbon intensity reduction threshold
- $1.75 per gallon for SAF, achieving the highest carbon intensity reductions and meeting prevailing wage and apprenticeship requirements
After the 2025 change, the SAF bonus was removed, reducing the effective tax credit value and making many planned SAF production projects financially unviable.
The Securing America’s Fuels Act would:
- Reinstate the SAF bonus credit at its original values ($0.35–$1.75 per gallon)
- Extend the full 45Z credit for all clean fuels through December 31, 2033 — providing eight additional years of investment certainty
- Maintain the credit’s carbon-intensity-based tiering, rewarding the lowest-emission fuels with the highest credit values
Why the Legislation Was Introduced
The 2025 credit reduction undermined SAF investment. Industry stakeholders, including NBAA, Airlines for America, and SAF producers, warned that eliminating the SAF-specific bonus rendered many planned projects economically unviable. The cost of producing SAF — particularly from agricultural feedstocks — remains significantly higher than conventional fossil jet fuel. Without a meaningful production incentive, the gap cannot close.
Long-term policy certainty is required for capital investment. SAF production plants require years of permitting, construction, and ramp-up. Investors and developers need multi-year policy certainty to commit capital. A 45Z credit expiring in 2027 (its current horizon without further legislation) is insufficient to finance new facilities.
Agricultural competitiveness and energy independence. Senator Moran framed the bill explicitly in terms of US energy dominance: Kansas alone produces 35% of all general aviation aircraft in the US, and its farmers produce sorghum, wheat, and other key SAF feedstocks. The bill positions SAF as an agricultural export opportunity, not merely an environmental measure.
CORSIA pressure. With CORSIA Phase 2 becoming mandatory in 2027, US airlines face growing international obligations to reduce or offset aviation emissions. SAF is the primary compliance tool. Without domestic production incentives, the US risks falling behind in the global SAF supply race.
Who Is Affected
SAF Producers and Biofuel Companies The reinstatement of the SAF bonus credit is the primary driver of new plant investment decisions. Companies including Gevo, Montana Renewables, and others with planned or active SAF facilities have explicitly cited the 45Z bonus as critical to project economics.
Airlines and Commercial Aviation Operators’ Domestic SAF availability and cost are directly tied to the production credit. Higher producer incentives translate — over time — into greater supply and lower SAF procurement costs for airlines.
Business Aviation (NBAA) NBAA welcomed the bill’s introduction, describing restoration of the $1.75 credit as “essential to scaling domestic production.” Business aviation operators face growing sustainability scrutiny and have a strategic interest in accessible, affordable SAF.
Agricultural Sector — Corn, Sorghum, Soybean, and Forestry Producers The bill creates a direct link between SAF production economics and farm income. Biofuel refiners converting crops to SAF depend on production credits to maintain viable margins; without the bonus, demand for agricultural SAF feedstocks weakens.
Fuel Investors and Private Capital The Americans for Clean Aviation Fuels Coalition estimates that a scaled domestic SAF industry could increase US GDP by more than $78 billion by 2035 and support over 400,000 jobs. Investment decisions hinge on credit certainty.
Legislative Timeline
| Milestone | Date |
|---|---|
| Section 40B SAF Blender’s Credit (IRA) | 2022–2024 |
| 45Z Clean Fuel Production Credit introduced | January 1, 2025 |
| “One Big Beautiful Bill” eliminates SAF bonus | 2025 |
| House companion bill introduced | 2025 — Reps. Flood and Davids |
| Securing America’s Fuels Act introduced in Senate | February 4, 2026 |
| Senate committee consideration | TBD |
| 45Z credit current expiry (without legislation) | December 31, 2027 |
| Proposed extension under this bill | Through December 31, 2033 |
Operational Impact Analysis
Project Finance Decisions SAF production facilities require $500 million to $2+ billion in capital investment. Developers routinely cite the 45Z credit value as a primary input in their financial models. With the bonus eliminated, internal rates of return on new projects fall below investment thresholds for many developers. Reinstatement would restore viability for a significant pipeline of announced but uncommitted projects.
Supply Gap Risk Current US domestic SAF production is approximately 30 million gallons per quarter (as of 2024 reporting). The SAF Grand Challenge target is 3 billion gallons annually by 2030. The gap between current output and the 2030 goal is substantial. Without robust production incentives, the announced capacity pipeline — which represents over 3 billion gallons in potential production — risks stalling at the planning stage.
Airline Procurement Costs Airlines entering long-term SAF offtake agreements today do so against a backdrop of policy uncertainty. A 2033 credit extension would allow producers to offer more competitive long-term pricing, directly reducing airline SAF procurement costs relative to a credit-expiry scenario.
Rural Economic Development, USDA, and Congressional proponents frame the bill as rural economic legislation as much as aviation policy. SAF feedstock demand drives direct farm income, with downstream effects on rural employment, infrastructure investment, and agricultural commodity prices.
Industry Response
NBAA stated the legislation represents “key steps to scaling domestic production of the low-carbon fuel” and urged Senate passage.
SAF Coalition members — including Airlines for America, Gevo, and agricultural groups — issued statements welcoming the bill, with Gevo’s Chief Public Affairs Officer describing the legislation as delivering “real opportunity for farmers and new energy production.”
Senator Moran framed the bill in national security terms: “Every gallon of jet fuel sourced from an unstable region is a strategic liability.” He argued that domestic SAF production directly addresses US energy dependency.
Senator Ernst emphasised agricultural market opportunity: “When SAF successfully takes off, we open up new markets for our farmers, create more energy independence, and support our national security.”
IATA has not issued a specific response to the Senate bill, but has consistently supported robust national production incentives as part of its global SAF scaling advocacy.
Official Sources
- Senator Moran Press Release — Securing America’s Fuels Act, February 4, 2026
- Senator Cortez Masto Press Release, February 6, 2026
- NBAA Support Statement, February 5, 2026
- SAF Coalition Statement, February 4, 2026
- IRS Section 45Z Clean Fuel Production Tax Credit — Internal Revenue Code
Action Steps
Airlines, SAF producers, investors, and agricultural stakeholders should:
- Engage Senate Finance Committee members to support the bill’s advancement to markup and floor vote
- Review current SAF offtake agreements and procurement plans against a scenario of 45Z credit reinstatement versus expiry
- SAF project developers: update financial models under both credit-restored and credit-expired scenarios and identify the threshold Senate action date required for FID commitments
- Agricultural producers and cooperatives: engage through industry associations (NCGA, American Soybean Association) to support the legislation as a farm income measure
- Compliance and sustainability teams at airlines: integrate the bill’s legislative status into CORSIA Phase 2 planning and SAF supply chain strategy
- Monitor Senate Finance Committee scheduling — this bill’s pathway runs through tax and agriculture committee jurisdictions
Frequently Asked Questions
What is the 45Z Clean Fuel Production Tax Credit?
A tax credit introduced under the Inflation Reduction Act for the production of clean transportation fuels, including SAF. It replaced the Section 40B SAF blender credit as of January 1, 2025.
What did the “One Big Beautiful Bill” do to the 45Z credit?
It extended the 45Z credit for all clean fuels but eliminated the SAF-specific bonus tier, which had allowed SAF producers to receive up to $1.75 per gallon for the cleanest fuels. The remaining base credit offers less support for SAF production economics.
How much is the SAF bonus credit worth?
The reinstated bonus would allow qualifying SAF producers to receive between $0.35 and $1.75 per gallon, depending on the fuel’s carbon intensity and whether prevailing wage and apprenticeship requirements are met.
When does the current 45Z credit expire?
The reinstated bonus would allow qualifying SAF producers to receive between $0.35 and $1.75 per gallon, depending on the fuel’s carbon intensity and whether prevailing wage and apprenticeship requirements are met.
Is this bill now the law?
No. The bill was introduced in the Senate on February 4, 2026. It requires committee markup, floor vote, House reconciliation, and a presidential signature to become law
Why does credit certainty matter so much to SAF producers?
SAF production plants require years to build and billions in capital investment. Investors and project developers need policy certainty over timeframes of 8–10+ years to justify committing capital. Short-term or uncertain credits make project financing extremely difficult.
Does the US have a federal SAF blending mandate?
No. Unlike the UK and EU, the US does not have a federal mandatory SAF blending requirement. US SAF policy relies on tax incentives, voluntary targets, and state-level programs.
Editorial Note: This article is based on official Senate press releases, NBAA statements, and SAF Coalition publications dated February 2026. The Securing America’s Fuels Act is a proposed bill only and has not been enacted into law. All tax credit values and compliance timelines should be verified against official IRS and Congressional sources before making financial or operational decisions.
Researched and reviewed using official US Senate records, industry association statements, and publicly available tax policy documentation.
