What Does the Senate’s 45Z Proposal Mean for SAF?
Ros Johnston
Senior Conference Producer and Content Manager
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Sustainable Aviation Futures
I wanted to share an update on the U.S. Senate's version of the "Big, Beautiful Bill" which was announced last week, including significant changes to the 45Z Clean Fuel Production Credit, which, if implemented, could have impacts on the global SAF market.
Here’s what you need to know, and why this will be a central topic at SAF North America Congress, Houston, October 14–16.
What’s New, What's Not?
Feedstock Flexibility: Unlike the House version, which limited eligible feedstocks to those produced in North America, the Senate bill introduces a “20 percent haircut” on the value of the credit for fuels produced using feedstocks from outside the U.S., effective from 2026.
Indirect Land Use Change (ILUC): Both the House and Senate versions exclude ILUC from lifecycle emissions calculations, marking strong support for corn and soy based fuels, which are not permitted under ReFuelEU Aviation.
Reduced Dollars per Gallon: Under current law, SAF can qualify for up to $1.75 per gallon but the Senate’s version would significantly decrease that down to a maximum of $1 per gallon.
Support for Extension to 2031: Both the House and the Senate support extending the transferability for the 45Z tax credit through to 2031.
What does this mean?
Global Feedstock Participation, with Incentives for Domestics: By keeping foreign feedstocks eligible (albeit at a discount), the Senate avoids disconnecting global supply. Yet the haircut promotes U.S.-based feedstock use, nudging producers toward domestic sourcing.
SAF Cost & Competitiveness Challenges: Reducing the SAF premium could slow SAF adoption unless offset by complementary state incentives or voluntary corporate credits. Stakeholders fear this may dampen enthusiasm for higher-carbon alternatives in airlines and offtakers.
Stability for Investors: Extending the credit through 2031 provides developers extended runway for planning, financing, and offtake commitments. But clarity on credit amounts and regulatory treatment is still pending.
Policy Negotiations Ahead With the reconciliation process underway the final version may still shift. Feedstock eligibility, SAF-specific support, and ILUC rules are all on the table.
Why Houston, Why Now?
As U.S. policy undergoes rapid changes, international investors, producers, and airlines are watching closely. The Sustainable Aviation Futures North America Congress couldn’t come at a more critical time.
Held in Houston, October 14–16, the Congress will serve as a key forum for unpacking evolving SAF policy, including 45Z, IRA developments, and state-federal coordination, but it goes far beyond that. The event is designed to facilitate cross-border partnerships, global supply chain resilience, and technology collaboration at a time when cohesion and clarity are more important than ever. It offers the perfect platform to:
Unpack the evolving 45Z landscape and IRA impacts
Explore how state, federal, and corporate incentives intertwine
Build international supply chains that can weather policy changes
Shape solutions and partnerships in a rapidly shifting environment
Whether you're navigating shifting incentives, looking for reliable offtake partners, or working to build international production capacity, this is where the conversations that shape the industry’s future will happen.