Illinois governor signs bill establishing SAF tax credit

By Erin Voegele | February 07, 2023

Illinois Gov. JB Pritzker on Feb. 3 signed the Invest in Illinois Act. The legislative package, in part, creates a $1.50 per gallon sustainable aviation fuel (SAF) purchase tax credit to support the supply and use of SAF within the state.

The SAF tax credit will become effective June 1, 2023, and is currently in place through Jan. 1, 2033. The credit applies 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 can 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 new law 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.

LanzaJet has spoken out in support of the newly created SAF tax credit. “The passage of the Sustainable Aviation Fuel Purchase Credit positions Illinois as a leader in the energy transition,” said Jimmy Samartzis, CEO of LanzaJet. “These types of incentives accelerate the development of this new industry as we work hard to decarbonize the transportation sector. LanzaJet is excited to play a role in bringing SAF to new consumers across Illinois, and we encourage other states to support the sustainable fuels industry with similar measures and help meet the nation’s climate change goals.”