SUMMARY
- The US regulatory landscape favours bio-based SAFs, particularly those using a crop feedstock, as compared to other geographies like the UK and EU.
- While the new Trump administration has promised to cut support for renewables in favour of fossil fuels, red state-favouring biofuel incentives are likely to remain in place.
- SAF plants in the US have been able to overcome financial hurdles more quickly than European counterparts, and some investment has been funnelled towards e-fuel producers as disruptors in the SAF market. However, it is unclear whether this will continue throughout Trump’s second term, where fossil fuels and crop biofuels are favoured.
Due to its geography, the US is home to one of the most extensive aviation networks in the world, and its citizens far exceed those of any other country or region in terms of flights per capita1. Aviation represents about three per cent of US total greenhouse gas (GHG) emissions, with the sector expected to see “rapid year-over-year growth”2. It is also the world’s largest producer of crude oil, the critical feedstock of jet fuel, achieving record-level production in 20233.
As the global aviation industry increasingly recognises the importance of reducing GHG emissions, collaboration and harmonisation of sustainable aviation fuel (SAF) policies across countries are becoming more common through mechanisms like CORSIA. Previously, the US regulatory landscape has taken some distinct approaches to tackling aviation’s climate impact. While other governments have supported SAF by combining funding, legislation, incentives, and research and development initiatives, the US has chosen to heavily prioritise subsidy and tax credit mechanisms. However, much of this has changed under the new Trump administration as of 2025.
When compared to the SAF policy landscapes of other developed countries, US SAF policy is much more accommodating to biomass-based fuels — particularly crop-based SAF derived from corn or sugarcane — which are not permitted under environmental legislation in the EU4 or the UK5. The change in government in the US has posed several challenges in Europe, particularly for raising ambition in aviation decarbonisation6, and political tension between the regions — though progressing in areas such as trade7 — remains high.
In early 2025, the new Trump administration approved a loan of $1.67 billion for a plant that utilises “vegetable oils, fats, and greases” to produce SAF alongside other commodities like diesel and naphtha8. ICCT found that the US “has approximately 21.7 billion gallons of theoretical SAF production potential from available biomass, but only 12.2 billion gallons of that is from sustainably available biomass.”9 As such, SAF has become a highly politicised topic in terms of the environmental and socio-economic opportunities and risks it presents10.
The early months of Trump’s second term saw many environmental measures rolled back, risking an additional 2–4 billion tonnes of CO2 emissions by 203011. That has included removing the US from the Paris climate accords, facilitating new fossil fuel extraction, deregulation via the Environmental Protection Agency (EPA) and reconciliation bills which have made changes to the Inflation Reduction Act (IRA) tax credits12.
Inflation Reduction Act
Since 2022, the IRA has had a significant impact on the SAF market in the US by offering comprehensive support to encourage the production and adoption of these fuels. In addition to previously providing research funding, infrastructure investment, and market stability measures, the IRA offered key financial support for SAFs through the “45Z” Clean Fuel Production Credit (CFPC). This credit awarded SAF producers a tax credit equal to a base rate of up to $1.75 per gallon of SAF produced, multiplied by a carbon dioxide emissions factor set annually by the Secretary of the Treasury13.
Certain stakeholders have pushed to exclude SAFs made from imported feedstocks from eligibility in favour of domestic biofuels, as well as extending the credit until 2037, locking in such incentives for a longer period14. NGOs have opposed such moves on the basis that they exclude potentially lower-carbon e-fuels from eligibility for the tax credits15. However, changes in 2025 have seen the eligibility of conventional biofuels for 45Z broadened even further, risking wasted investment into already established technologies, alongside “eliminating any accounting for indirect land use change in estimates of life cycle emissions from alternative aviation fuels”16 via a model that yields lower lifecycle emission estimates than the international benchmark (ICAO).
Since the introduction of the IRA, which was widely compared and contrasted to the EU Green Deal17, European policymakers have been responding to the implications of the legislation within their own markets18. The approach to a regulatory framework to support SAF has differed between the two regions, but neither approach is yet viewed as “complete” in terms of assuring market certainty19. While President Trump continues to roll back large parts of the IRA as part of his administration’s deregulatory environmental agenda, conservative states are the beneficiaries of the majority of the legislation’s SAF incentives, leading experts to believe that it will not be dismantled in its entirety20.
SAF Grand Challenge
The Biden Administration launched the SAF Grand Challenge in 2021 with the aim of scaling domestic production, establishing a production target of three billion gallons by 2030 and 35 billion gallons by 205021 (compared to around 15.8 million available today22). The Grand Challenge is a collaborative programme between the Department of Energy (DOE), Department of Transportation (DOT), the Department of Agriculture (USDA), and other federal agencies, allowing for a harmonised approach to strategy and resource allocation, alongside acknowledging the need to engage the wider supply chain for SAF and diverse industry stakeholders with a role to play. In late 2024, a comprehensive strategy was launched outlining an implementation framework aimed at demonstrating alignment between government departments towards the Challenge23.
Some examples of initiatives and funding linked to the Grand Challenge include:
- Department of Energy grants: Some 13 SAF projects have received support, with the DOE awarding over $100 million in funding24 and $64.7 million given for projects producing cost-effective, low-carbon biofuels for heavy-duty transportation25.
- Bioenergy Technologies Office (BETO): The DOE has provided $16.7 million for biofuel and biochemical projects via BETO “that will significantly reduce GHG emission” in support of the SAF Grand Challenge26. BETO provides funding and support for SAF research, development, and demonstration projects.
- Fueling Aviation’s Sustainable Transition (FAST) programme: The Federal Aviation Administration (FAA) has made $291 million available to support the goal of net-zero GHG emissions from aviation by 2050, comprising $244.5 million for SAF projects, and $46.5 million for low-emission aviation technology projects27.
In early 2025, the Trump administration approved a government-backed loan guarantee for a biofuel SAF refinery — Montana Renewables — that will “allow it to expand production to 315 million gallons per year, and produce about half of North American SAF, a fuel made from fats from seed oils and tallow that is lower in greenhouse gas emissions than conventional jet fuel.”28
Renewable Fuel Standard
While primarily focused on transportation fuels like ethanol and biodiesel, the Renewable Fuel Standard (RFS) also includes provisions for advanced biofuels, which qualify as SAFs. This policy sets annual targets for the blending of renewable fuels, called Renewable Volume Obligations (RVOs), creating market incentives for SAF production, and has supported investment into biofuel production infrastructure. Recent proposals via the EPA29 have been described as a “handout for conventional biofuels” like fuels like corn ethanol and biomass-based diesel at the expense of innovative new technologies30. It sets rules that promote domestic interests whilst penalising imports, and is expected to be finalised in late 202531.
State-level initiatives
Independent US states are pursuing their own SAF activities, including California’s Low-Carbon Fuel Standard, Oregon’s Clean Fuels programme and Washington’s Clean Fuels Standard, all of which have aviation fuels as “opt-in” fuels whereby SAF can generate credits; however, conventional jet fuel use is not penalised32. States are expected to become the hub for American SAF innovation as many look to “Trump-proof” their existing renewable energy programmes33.
There are a handful of SAF projects scaling up across the US34 and some investments are starting to flow into e-fuel first-of-a-kind (FOAK) projects at the state-level. Project Roadrunner in Texas, which will convert waste carbon dioxide and renewable power into SAF and other low-carbon fuels through financial support from Breakthrough Energy Catalyst, Citi and American Airlines35.
Other financial mechanisms
The US government has deployed several other funding, tax credit and subsidy schemes that can benefit the SAF market, as outlined in Table 1. However, it must be noted that key programmes once offered by the USDA, such as the Biomass Crop Assistance (BCAP) and Rural Energy for America (REAP) programmes, have now been stalled, and there is uncertainty over whether they will be reopened36.
| Department | Scheme | Purpose |
| USDA | BioPreferred programme | Aims to increase the use of bio-based products, including fuels, across federal agencies. It provides opportunities for SAF producers to gain visibility and access federal procurement opportunities. |
| Department of Defense (DOD) & NASA | Federal procurement | The US Government has shown interest in using SAFs for its own fleet of aircraft. Federal agencies have been exploring opportunities to incorporate SAFs into their operations, setting an example for the broader aviation industry. |
| DOT & FAA | Commercial Aviation Alternative Fuels Initiative | CAAFI works to promote the development and deployment of SAFs. It facilitates collaborations between government, industry, and academia to accelerate the commercialisation of SAFs. |
| Research and development programmes | The FAA also supports SAF testing and analysis Aviation Sustainability Center (ASCENT) research projects and through the Continuous Lower Energy, Emissions, and Noise (CLEEN) programme. |
Further analysis of US policy
- InfluenceMap have produced an extensive briefing outlining the US SAF policy landscape and how industry has been responding to and engaging with policy development. Read their briefing here.
- The International Council on Clean Transportation (ICCT) have produced a white paper outlining the current and future policy measures needed to be able to meet the aspirations of the SAF Grand Challenge, expertly outlined here.
- ICCT have also conducted an extensive analysis of the current and projected future costs of e-kerosene in the US and Europe, noting the role policy can play in scaling these fuels that are more sustainable and scalable than their bio-SAF counterparts. Read more here.
- The Rocky Mountains Institute (RMI) have conducted research and analysis into the evolution of US SAF Policy and regional opportunities in their extensive report you can read here.
- RMI have also summarised the role of state-level action, focusing on hydrogen-derived fuels in hard to abate sectors like aviation in their analysis here.
- The World Resources Institute (WRI) have outlined how recent lobbying campaigns and industry action in the US have allowed less sustainable aviation fuels to be eligible for tax credits. Read that analysis here.
- WRI have also produced a report, The United States should not turn food into aviation fuel, in June 2025 in response to tax credit changes.
Our aviation programme focuses on Europe as a key region where action on addressing the climate impact of aviation is needed through scaling high integrity synthetic SAF, challenging dominant industry narratives and accelerating zero emission flight. The US is an influential global player in the SAF space, and its regulatory framework is actively shaping investment and action in Europe and beyond, which this briefing aims to summarise. To hear more about our aviation work, get in touch.
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