Illinois lawmakers approve $1.50 per gallon SAF tax credit

By Erin Voegele | January 25, 2023

Both houses of the Illinois General Assembly on Jan. 10 approved a legislative package that, in part, creates a $1.50 per gallon tax credit for sustainable aviation fuel (SAF). The legislation, known as the Invest in Illinois Act, or SB 2951, must now be signed by Illinois Gov. JB Pritzker.

According to the legislation, the credit would be in place starting June 1, 2023, through Jan. 1, 2033, and would apply to SAF sold to or used by an air carrier. To be eligible for the credit, SAF must achieve a 50 percent lifecycle greenhouse gas (GHG) reduction when compared to petroleum-based jet fuel using either the lifecycle methodology for SAF developed by the International Civil Aviation Organization or the most recent version of Argonne National Laboratory’s GREET model.

Prior to June 1, 2028, the credit could be claimed for fuel derived from biomass resources, waste streams, renewable energy sources, or gaseous carbon oxides. Beginning on June 1, 2028, the fuel must also be derived from domestic biomass resources. Fuel produced from palm feedstock is not eligible for the credit. The legislation also includes a provision that states until July 1, 2033, on an annual basis, no credit may be earned by an air carrier for soybean oil-derived SAF once air carriers in the state have collectively purchased SAF containing 10 million gallons of soybean oil feedstock.

Additional information, including a fully copy of the legislation, is available on the Illinois General Assembly website.