(The Center Square) – Major airlines are lined up to push for tax incentives in Illinois when purchasing sustainable aviation fuel, or SAF.
House Bill 5749 of state Rep. Mike Zalewski, D-Riverside, was discussed last month during a House Revenue and Finance Committee hearing. The measure promotes greater use of sustainable aviation fuel by providing a $2 per gallon credit for SAF use.
Bill Glunz of American Airlines said the measure makes sense for airlines as they continue their efforts for cleaner energy.
“We are big consumers of fossil fuels, it’s no secret, and that’s how we move the needle,” Glunz said. “The big way is sustainable aviation fuel.”
Dan Lynch of United Airlines argued that they needed the right policies in place to facilitate airlines.
“The cost of SAF today versus conventional jet fuel is a significant gap,” Lynch said. “We have to close this gap. We need government incentives to close this gap.
The Illinois Department of Revenue said the issue was worth discussing, but warned that the more FAS was used, the more prohibitive the cost of credit would become for the state.
United Airlines’ Aaron Robinson told the committee that SAF can be made with agricultural byproducts, similar to biodiesel, which could make Illinois a major player if the right policies are in place.
“To really make those benefits, reductions in greenhouse gas emissions, improved local air quality, and clean economy jobs are all a reality here in Illinois and can really establish himself as a national leader to actually enable a cleaner future,” Robinson said.
Illinois Department of Revenue Director David Harris said that is not what this bill does.
“You want to establish some kind of credit like we’ve done for other industries, that if you set up in Illinois, you’ll get credit for producing in Illinois,” Harris said.
There are also concerns that the provision could provide credit for fuel purchased in Illinois but not taxed because it is an international flight.
It is unclear whether the measure would move forward in the final weeks of the scheduled session before a new General Assembly is seated in mid-January.