The production of sustainable aviation fuel (SAF) in the U.S. has seen remarkable growth in recent years, largely driven by incentives introduced by the Biden administration. However, with Donald Trump returning to office, the future of SAF remains uncertain, as early decisions by his administration suggest a shift in policy direction. Experts warn that the industry’s trajectory could be significantly altered depending on whether Trump continues, modifies, or eliminates key incentives that have fueled SAF production.
Over the past few years, the aviation industry has increasingly turned to SAF as a solution to reduce carbon emissions. According to the International Air Transport Association (IATA), SAF is expected to account for 65% of the emissions reductions needed for the aviation sector to reach net-zero emissions by 2050. In line with this goal, the Biden administration set an ambitious target of producing 3 billion gallons of SAF annually by 2030, enough to supply about 10% of U.S. aviation fuel needs.
Production figures reflect this momentum. In 2023, the U.S. produced 38.7 million gallons of SAF, a significant jump from 14 million gallons in 2022 and just 7.9 million gallons in 2021. With major energy companies such as Phillips 66 and Valero expanding their SAF capacity, production was expected to reach nearly 800 million gallons in 2024, according to estimates by the U.S. Department of Agriculture and the University of Illinois.
One of the primary drivers of SAF production has been tax credits provided through the Inflation Reduction Act (IRA). Under this program, SAF purchasers received tax credits ranging from $1.25 to $1.75 per gallon, helping to bridge the cost gap between SAF and conventional jet fuel, which remains about $2 cheaper per gallon. However, with the expiration of this program at the end of 2024, the industry now faces uncertainty regarding future financial support.
The Biden administration had planned to replace the expiring tax credit program with a new sliding-scale system that would provide direct financial incentives to SAF producers through 2027. However, implementation of this program now falls under Trump’s administration, and early indications suggest potential delays.
One of Trump’s first executive orders after taking office was a 60-day freeze on all pending regulations. While such holds are standard practice for incoming administrations, Trump’s history of skepticism toward climate initiatives raises concerns about whether the tax credit program will proceed at all. Experts warn that without federal support, SAF production could stagnate.
Fayaz Hussain, editor of the trade publication SAF Investor, expressed concern over the lack of clarity, stating, “It’s going to be completely unpredictable. You can never tell how Trump will perceive something. Everything is going under the microscope.”
Adding to the uncertainty, the Department of Energy recently delayed the release of a $782 million loan to Montana Renewables, a company set to expand its SAF production capacity from 60 million to 300 million gallons annually. The company described the delay as a strategic move by the administration to ensure the loan aligns with its policy priorities.
The administration has also removed federal webpages detailing SAF initiatives, including information on $244.5 million in Federal Aviation Administration (FAA) grants for SAF projects. These actions have raised alarms among industry stakeholders who fear a rollback of support for SAF development.
Despite the challenges, some experts believe SAF could still fit into Trump’s broader energy agenda. The Trump administration has long emphasized “American energy dominance,” a policy framework focused on increasing domestic energy production. Since corn-based ethanol is expected to be a major source of SAF, there is a possibility that Trump could support SAF production as part of an effort to boost rural economies and create jobs in agricultural sectors.
Alison Graab, executive director of the SAF Coalition, noted that SAF aligns with some of Trump’s key economic priorities. “Helping rural communities create jobs, creating new agricultural markets all of that ties into the new administration’s goals,” she said.
Scott Lewis, a division president at World Energy, echoed this sentiment. His company, which expects to produce 30 million gallons of SAF at its California refinery this year, hopes to work with the Trump administration to demonstrate how SAF can contribute to economic growth. “Each administration has its own agenda of what it is trying to achieve. It is industry’s role to tell them how we can help achieve it,” Lewis stated.
While uncertainty looms at the federal level, some industry analysts see potential support from Congress, particularly from farm-state Republicans who recognize SAF’s economic benefits. Lawmakers from agricultural regions may advocate for SAF incentives, even if they frame the issue in economic rather than environmental terms.
Additionally, some states, including Washington, Illinois, and Minnesota, have introduced their own SAF incentive programs. According to Hussain, these state-led initiatives may provide a crucial safety net. “The only silver lining I see is state support. States are probably going to remain committed to this,” he noted.
The future of SAF in the U.S. remains uncertain under the Trump administration. While the industry has experienced rapid growth in recent years, changes in federal policy could slow progress. The fate of key tax credits, regulatory decisions, and federal funding programs will determine whether SAF continues its upward trajectory or stalls due to policy shifts.
Despite these challenges, SAF still has potential allies in Congress and state governments. The industry’s ability to align itself with Trump’s energy priorities such as rural job creation and domestic fuel production may ultimately decide whether sustainable aviation fuel remains a key part of U.S. energy policy in the years to come.
