U.S. lawmakers to propose sustainable aviation fuel tax credit


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A Delta plane is seen from Los Angeles International Airport (LAX), in Los Angeles, California, United States, April 5, 2021. REUTERS / Carlos Barria

U.S. lawmakers plan to introduce a bill on Thursday that would create a low-carbon, sustainable aviation fuel tax credit, which they hope will reduce the industry’s greenhouse gas emissions aeronautics.

The legislation, seen by Reuters, would impose a tax incentive of up to $ 2.00 for every gallon produced of sustainable aviation fuel, which can be made from raw materials such as grease, animal fats and oils. vegetable. This price would make it one of the most expensive subsidies for clean fuels.

The United States uses about 45 million gallons per day of jet fuel, or about 6% of total oil consumption, according to the US Energy Information Administration.

US Representatives Brad Schneider, a Democrat from Illinois; Dan Kildee, a Democrat from Michigan; and Julia Brownley, a Democrat from California, are expected to introduce the bill.

Lawmakers have pushed for action to tackle climate change as President Joe Biden’s administration called on the US economy to have net zero greenhouse gas emissions by 2050, this which means removing as much carbon from the atmosphere as it is emitted.

It was not immediately clear whether the sustainable aviation fuel bill would have Republican support. Schneider told a press conference on Thursday that officials were working to build bipartisan support for the bill.

Republicans have opposed the administration’s climate policies, arguing they risk damaging the economy by harming the drilling and mining industries.

In recent months, airlines and renewable fuel companies have pressured the federal government to support the development of sustainable aviation fuel, saying it is necessary to reduce emissions of gas to aircraft greenhouse effect.

Air transport contributes around 2% of global emissions, according to the Air Transport Action Group, a coalition of aviation experts focused on sustainability issues.

Climate groups such as the Environmental Defense Fund and the World Wildlife Fund, as well as industry groups like United Airlines and Airlines for America are supporting the bill.

A coalition of more than 50 groups, including energy companies such as World Energy, Neste (NESTE.HE) and LanzaJet, delivery companies FedEx (FDX.N) and United Parcel Service (UPS.N), and companies airlines such as Delta Air Lines (DAL.N) sent a letter to officials on Thursday expressing support for the bill.

“American has an ambitious target to achieve net zero carbon emissions by 2050, and we see sustainable aviation fuel as the most promising way to achieve fuel efficiency gains and reduce our emissions in the near term. “said Jill Blickstein, of American Airlines (AAL.O) managing director of ESG, said in an email.

While the consumption of sustainable aviation fuel in the United States has increased in recent years, it remains a fraction of the larger traditional market for petroleum-based jet fuel.

Producers of sustainable aviation fuel may qualify for the tax credit if the fuel provides at least a 50% reduction in life-cycle greenhouse gas emissions compared to petroleum-based jet fuel, according to the legislation.

The credit expired at the end of 2031.

A coalition of business groups representing pilots, flight attendants and other aviation industry personnel sent a letter and documents to members of the congressional committee on Tuesday outlining ways to reduce carbon emissions. Solutions included the tax credit.

Our standards: Thomson Reuters Trust Principles.

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