Biden Reintroduces His Campaign for a Sustainable Aviation Fuel Tax Credit

"We brought together government agencies, aircraft manufacturers, airlines, fuel suppliers, and airports," Biden said at an Iowa event, saying that the effort will result in "advanced, cleaner, and more sustainable aviation fuels for America."

George Novak, President and CEO of the National Air Carrier Association, commended Biden for "recognizing the essential role that sustainable aviation fuel will play in further decreasing the airline industry's carbon impact."

Airlines are under pressure from environmental organizations to reduce their carbon footprints and have committed to using more environmentally friendly aircraft fuel (SAF).

Biden mentioned American Airlines' (NASDAQ:AAL) and United Airlines' support for sustainable aviation fuel on Tuesday, stating that biofuels were critical for aviation's decarbonization.

"That is the path we will take," Biden said.

The attempt to expedite carbon reductions in aviation is part of Biden's goal of achieving net carbon neutrality in the United States by 2050.

It comes as the US and Europe seek to increase production of SAF, which is currently produced in trace amounts from feedstocks such as discarded oil and may cost up to five times as much as normal jet fuel.

In September, the White House announced that three US government agencies would launch a challenge to supply at least 3 billion gallons of SAF per year by 2030 and sufficient SAF by 2050 "to meet 100 percent of aviation fuel demand, which is currently estimated to be around 35 billion gallons per year."

Airlines for America, a trade association that represents American, United, and other airlines, lauded Biden's request for a blender's tax credit and the $3 billion target that has bipartisan support in Congress. The association said that the credit "would contribute in the development of the embryonic market for SAF by providing a financial incentive for fuel producers to incorporate more SAF into the gasoline supply at a price that would encourage airlines to adopt it."