The future of sustainable aviation fuel (SAF) under United States President Donald Trump in this new year is uncertain. Trump’s administration has promised to significantly scale back federal efforts to mitigate climate change, which could impact the development and use of Sustainable Aviation Fuel (SAF). Production of domestic sustainable aviation fuel (SAF) has grown rapidly in recent years, driven in part by Biden administration incentives. But early moves by the Trump administration are fuelling uncertainty about what will come next in the United States and ultimately globally.
SAF is a fuel that can be produced from non-petroleum-based renewable feedstocks, including, but not limited to; the food and yard waste portion of municipal solid waste, woody biomass, fats/greases/oils, and other feedstocks. SAF can be blended at different levels with limits between 10 percent and 50 percent, depending on the feedstock and how the fuel is produced.
The Biden Administration’s Inflation Reduction Act, which included a tax credit for SAF production, has been frozen by Trump’s administration. This tax credit was crucial for the development of SAF, as it helped bridge the price gap between SAF and traditional petroleum-based fuel. The Trump administration has also removed some federal web pages related to SAF initiatives, including sites detailing the $244.5 million in grant funding the FAA allocated last year to SAF projects, according to reports.
Also, the Trump administration’s potential increase in tariffs on imported goods from China could affect the availability of non-petroleum feedstocks needed for SAF production.
Despite these challenges, some experts believe that the SAF industry could still thrive under Trump’s administration. For example, Trump’s focus on rural economic priorities could lead to an increase in corn-based ethanol production, which could be used as a feedstock for SAF.
However, the long-term outlook for SAF under Trump’s administration remains uncertain. The industry relies heavily on government incentives and support, which could be reduced or eliminated under Trump’s administration.
IATA estimates that SAF will be responsible for 65 percent of the emissions reductions that will be required for the industry to achieve its goal of net-zero emissions by 2050, also adopted by the United Nations aviation arm. It seems SAF is entering a turbulent future, with many questions arising from the uncertainty that currently clouds it around achieving net zero.
Less than four years after boldly pledging to reach net zero emissions by 2050, IATA appears to be dropping the target. Willie Walsh, IATA director general, speaking at an industry event in Phoenix, expressed strong doubts airlines could meet their emissions goals in the next 25 years. Facing a diverse audience of financiers, lessors, banks, and industry stakeholders, Walsh acknowledged for the first time that the sector is unlikely to meet its long-standing target. This admission not only marks a turning point for IATA but also calls for deep thinking about the feasibility of the aviation industry’s current sustainability plans.Â
The benefits of SAF point to how fundamental its production is for achieving net zero. The aviation industry accounts for 2.5 percent of global Co2 emissions, but it has contributed around four percent to global warming to date, say reports. With SAF, however, it has the potential to lower flight emissions by 80 percent, compared to conventional jet fuel. It is also a drop-in fuel, meaning there is no need for modifying aircraft or constructing new fuelling stations. SAF produces fewer harmful pollutants and contains lower levels of sulphur and aromatic components, allowing aircraft engines to burn more cleanly and generate less pollution compared to conventional fuels.
Perhaps there are indications that the ESG landscape is in a state of flux. JPMorgan and Morgan Stanley have officially exited the Net Zero Banking Alliance, marking a pivotal moment in the ongoing discourse around financial commitments to climate goals. Their departures signal not just a retreat from collective climate pledges but also raise questions about the future of net zero ambitions among U.S. banks.Â
From high-profile exits of major banks to ambitious corporate sustainability goals, the actions taken now will shape the future of responsible investing and corporate accountability. Stakeholders in the aviation industry must navigate these changes carefully, as the stakes are becoming higher.
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