Funding Measure Restores The Expired Section 40A Biodiesel Credit Through 2022

A group of aviation stakeholders on Thursday welcomed congressional legislation including provisions aimed squarely at promoting the development and use of sustainable aviation fuels (SAF).

The House and Senate approved the legislation last week, as part of a fiscal year 2020 appropriations package. The language contains a renewal-and-extension of the biodiesel tax incentive, for which certain fuels are eligible.

The funding measure restores the expired Section 40A biodiesel credit through 2022. Under that provision, a tax credit is available to qualified producers, or blenders of sustainable fuels derived from biomass, one of several SAF pathways, which meet applicable ASTM specifications.

The biodiesel tax incentive remains critical to the industry’s efforts to research, produce and scale SAF use. Ten years ago, the business aviation community made a commitment to sustainability and carbon neutral growth. Utilization of SAF by business aviation operators is an important part of this commitment, along with rapid and continuing advancements in fuel efficiency, advanced aerodynamics and noise reduction.

The Sustainable Aviation Fuels Coalition — which includes the European Business Aviation Association (EBAA), General Aviation Manufacturers Association (GAMA), International Business Aviation Council (IBAC), National Air Transportation Association (NATA) and National Business Aviation Association (NBAA) — has demonstrated the safe, real-world use of SAF and business aviation’s commitment to sustainability.

The stakeholders group is part of a growing coalition advocating for a broader and long-term SAF tax credit applying to all pathways, and promoting an investment in production capacity.

“NBAA’s 11,000 member companies are committed to increasing the utilization of SAF in our daily operations,” said NBAA president and CEO Ed Bolen. “This innovative fuel can reduce C02 emissions by up to 80%, and they are a critical part of business aviation’s commitment to sustainability.”

“This is a great example of the aviation industry working together and pushing for an incentive from Congress for companies to invest in the production of sustainable aviation fuels,” said Timothy Obitts, chief operating officer of NATA. “These tax incentives, coupled with state initiatives like California’s Low Carbon Fuel Standard program, will help create the supply of sustainable aviation fuels that the business aviation industry is demanding. SAF is one of the critical pieces that will help the industry achieve cleaner skies for future generations.”

“We are glad that Congress took action to extend the biodiesel tax credit, which benefits certain sustainable aviation fuels,” said Pete Bunce, GAMA president and CEO. “The general aviation industry is aggressively promoting the use of sustainable fuels, and we will continue to work with policymakers and other stakeholders to support its use. It is our commitment that 2020 will build upon the momentum of this past year through a March SAF summit in Washington and other events and initiatives.”

“Congressional action to renew and extend the biodiesel tax incentive demonstrates continued U.S. leadership among its international peers to encourage the production and use of SAF, a critical technology to reducing aviation’s greenhouse-gas emissions,” said Kurt Edwards, director general of IBAC. “At the International Civil Aviation Organization, IBAC, on behalf of the global business aviation sector, has called on all governments to put in place such policies, which will enable the industry to grow sustainably while bringing economic activity and connectivity to all corners of the world.”

(Source NBAA news release. Image from file)

FMI: www.futureofsustainablefuel.com