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Airlines launch group to protect jet fuel tax credit

Apr 29, 2024
Illustration of a plane in a bubble

Illustration: Natalie Peeples/Axios

Major airlines are uniting in defense of the "sustainable" fuel credit created by President Biden's new climate law.

Why it matters: It's a sign that companies are taking seriously the odds of a GOP victory in November that would threaten the climate law.

  • Not to mention the credit is going to be helpful for some airliners' climate plans.

Driving the news: More than 40 companies — including American Airlines, JetBlue and United — today are announcing the Sustainable Aviation Fuel Coalition, a group to "advocate for the incentives and policies necessary" to boost production of the now-in-vogue alternative jet fuels.

  • The coalition also includes Boeing, ethanol trade groups and SAF producer startups like Gevo and World Energy, according to a news release.

Zoom in: The coalition wants to "expand" existing credits for making the special fuel and "secure broad, bipartisan legislation that will rapidly advance" its availability, according to a document included in the announcement of the group.

  • The announcement doesn't explicitly mention the threat of repeal. But the subtext is clear.

The big picture: So-called "sustainable" aviation fuel is made from material other than petroleum and reduces carbon emissions, according to the Energy Department.

  • Industry-wide use of SAF is increasing, but still in its very early stages.

Between the lines: There's conspicuous timing with this announcement because, according to recent reporting, the Biden team will say how it'll measure jet fuel emissions for the credit as early as tomorrow.

  • There's controversy over whether ethanol, the corn-based fuel with a complicated carbon footprint, will qualify.
  • But in Congress, there's some bipartisan support for the credit being used broadly in the biofuel sector.

What they're doing: Sixteen senators — including John Thune, who's been floated as a potential replacement to Mitch McConnell as Republican leader — wrote the Treasury Department last year on implementation of the credit, asking it to use a federal emissions model benefiting ethanol.

  • This demonstrates how support for ethanol could save the overall jet fuel credit from an IRA repeal-ready Trump administration.

Yes, but: One powerful industry — the trucking sector — is angry about competition for ethanol stocks and whispering about possible legal challenges over the credit's implementation.

Our thought bubble: This is only the beginning of the defense playbook for corporate America on the climate law.

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