US representatives in Michigan have launched a bipartisan sustainable aviation fuel production plan that would establish an income tax credit for fuel producers and blenders in the state.
The proposed bill would provide a $1.50/gallon tax credit for purchasing, producing, or blending SAF in Michigan, according to a release from the state’s Republican Party.
“I am proud to be part of a commonsense, bipartisan approach to enlisting Michigan farmers in the effort to provide cleaner aviation fuel in our state,” said Representative Joseph Bellino.
“It is a proactive solution that supports our local farmers, boosts our agriculture industry, and better ensures stable fuel costs — all while also helping cut harmful emissions.”
Uptake of SAF is expected to grow significantly in the coming years, with the alternative fuel widely seen as the best medium-term fuel decarbonization pathway for the aviation sector until alternative powertrains like battery electric or hydrogen come to fruition.
Michigan’s previous tax credit ran from 2022 to 2025 and offered $1.25/gallon for qualified SAF. The credit was not extended before its January expiration.
Similar legislation has been introduced in other states to incentivize SAF use. In February, Washington proposed expanding its existing tax incentives and supporting the creation of infrastructure.
The proposed Michigan SAF credit is designed to support farmers in the state by rewarding ethanol-derived aviation fuels.
If the incentive passes, it will have a maximum cap of $4.5 million in its first year and $9 million per year for the following nine years.
Originally shared by Quantum Biofuels Daily. Title updated for purpose.
Notice: The Michigan Advanced Biofuels Coalition (MiABC) does not lobby or influence policy in any way. The policy interests of Michigan soybean farmers and biodiesel producers are supported by the Michigan Soybean Association and Clean Fuels Alliance America, respectively.