As sustainable practices reshape industries worldwide, Sustainable Aviation Fuel (SAF) has emerged as a promising growth opportunity for U.S. biofuel production—especially for American agriculture. Recent analysis from CoBank’s Knowledge Exchange indicates that agricultural feedstocks could soon play a pivotal role in SAF production, if supported by favorable policies and incentives.
The SAF sector is uniquely positioned to help the U.S. reduce greenhouse gas emissions while strengthening domestic energy production. As regulatory measures such as the Clean Fuel Production Credit (45Z tax credit) prepare to go into effect, stakeholders in agriculture and renewable fuels are optimistic that SAF could spur growth for farmers, renewable fuel producers, and rural communities alike.
45Z Tax Credit: Fueling Biofuel Production Growth
Under the Inflation Reduction Act, the 45Z tax credit is intended to replace the former 40B tax credit and will officially take effect on January 1. This incentive aims to support low-carbon fuel production by encouraging more flexible conservation practices on farms across the U.S. While the 40B tax credit provided initial support, farmers and biofuel economists felt its prescriptive requirements didn’t accommodate the diversity of American agriculture. With more adaptable requirements, the 45Z credit is expected to better support farmers in growing feedstocks for SAF production.
Jacqui Fatka, an economist at CoBank, noted the challenges of the previous tax credit, emphasizing farmers’ desire for flexible options suited to their unique operations. For the agricultural sector, flexibility is essential as farms across various states have different soil, climate, and logistical conditions.
“Farmers are hoping the new guidance offers more flexibility to employ practices that are applicable to their individual operations. The 40B guidance reflected a one-size-fits-all approach, which is certainly not the case for farms spanning the entire country,” Fatka explained.
U.S. Agriculture: A Key Player in Sustainable Aviation Fuel
The adoption of SAF presents an unprecedented opportunity for U.S. agriculture to fuel a rapidly growing renewable energy sector. By using feedstocks like corn and soybean oil, SAF can help reduce the carbon footprint of aviation while offering a long-term market for farmers. This would be especially beneficial in rural communities, providing stability through alternative revenue streams, even during periods of low commodity prices. Furthermore, demand for SAF is projected to create a pathway to achieving the U.S. SAF Grand Challenge, which aims to produce 3 billion gallons of SAF by 2030 and a staggering 35 billion gallons by 2050.
The potential for SAF to stimulate economic revitalization in rural areas is significant. From creating jobs in feedstock cultivation to spurring investments in biofuel facilities, SAF has the potential to offer U.S. agriculture a more sustainable, stable future in partnership with the aviation industry.
VURDHAAN: Supporting Sustainable Fuel Solutions in Aviation
As an active consultant in the aviation sector, VURDHAAN is dedicated to advancing sustainable solutions for the industry. Our expertise in sustainable aviation fuels, regulatory compliance, and carbon reduction strategies aligns closely with the SAF Grand Challenge. By providing strategic guidance on Sustainable Aviation Fuels and helping clients navigate the 45Z tax credit, VURDHAAN assists organizations in maximizing their impact in low-carbon fuel production and aligning with industry standards.
Through our Support, Educate, and Implement approach, VURDHAAN helps clients address regulatory requirements while fostering long-term sustainability. This methodology ensures that biofuel producers, agricultural suppliers, and aviation companies alike can confidently engage in SAF initiatives and make meaningful contributions to carbon reduction.
A Long-Term Commitment to Renewable Fuel Production
The SAF market offers transformative potential, but long-term policy certainty remains crucial. As Fatka noted, current guidance for the 45Z tax credit is only authorized for three years starting in 2025, limiting the predictability that farmers and producers need to plan for the future.
Still, the SAF Grand Challenge and federal support are positive signals that the U.S. is committed to low-carbon fuel solutions. Policymakers and industry leaders are working toward a framework that can deliver sustainable benefits, meet emissions targets, and strengthen the domestic agricultural sector. For now, the SAF market presents a pathway forward that’s hopeful, but with the promise of even greater impact through longer-term policies and stronger partnerships with the airline industry.
Conclusion: SAF and the Future of U.S. Agriculture and Aviation
The potential for SAF to stimulate growth in both aviation and agriculture is undeniable. By empowering farmers with flexible policies and stronger incentives, the U.S. can harness its agricultural resources to create a robust, low-carbon fuel supply chain. With industry expertise and dedication to sustainable practices, VURDHAAN is ready to support the aviation sector and its partners in reaching these ambitious goals.
As the U.S. takes steps toward the SAF Grand Challenge, VURDHAAN will continue to provide the knowledge, resources, and strategic guidance needed to drive sustainability in aviation and beyond. Together, we can create a future where agriculture and aviation work hand-in-hand to create cleaner skies and thriving rural communities.