Michigan committee hears testimony on sustainable aviation fuel tax credits; substitute adopted for HB 44-25

The House Transportation Infrastructure Committee on Tuesday heard extensive testimony on House Bills 44-24 and 44-25, a package to create a Michigan sustainable aviation fuel incentive program that backers say would build local supply chains and new markets for farmers.

Sponsor Representative Nyer, who described the bills as an effort to “encourage farmers and blenders to create the needed supply chain within our state for production,” said the proposal aims to attract ethanol producers and blenders to produce a 50/50 blend of ethanol-based SAF and conventional jet fuel and to spur investment in in-state blending and production facilities.

The bills would fund incentives beginning with $4,100,000 in the first year and then provide up to $9,000,000 per year for a 10-year period; the sponsor and supporters said the program contains a 10-year sunset. The draft legislation also specifies that after Jan. 1, 2030, sustainable aviation fuel used under the program must be derived from domestic feedstock.

Why it matters: Airlines and producers testified that SAF is currently scarce and significantly more expensive than conventional jet fuel, and that state incentives could attract new production, create rural jobs and allow Michigan airports such as Detroit Metropolitan Wayne County Airport to source fuel locally. Delta Air Lines and industry groups said SAF can be used now as a “drop-in” fuel without aircraft modifications.

Clean Fuels Michigan policy manager Chase Atanasio told the committee the bills “represent a smart and timely opportunity for Michigan to lead in a growing sector with massive economic and strategic value,” citing potential jobs across agriculture, manufacturing and construction.

Delta’s state government affairs director Sarah Gonzalez said Delta uses tens of millions of gallons of fuel in Michigan and supports incentives to expand SAF supply. “Sustainable aviation fuel is a practical solution to help ensure the long-term viability of Michigan’s aviation sector,” Gonzalez said, adding that last year Delta purchased about 300 million gallons of SAF industry-wide and that the airline seeks much greater volumes over the next decades.

Farm groups also testified. John Delmati, identified as president of the Michigan Corn Growers Association, and Scott Piggott, the group’s executive director, said corn growers face tight margins and that additional local demand could reduce basis costs and support rural economies. “Right now we have a surplus of corn,” Delmati told the committee, describing the financial stress on family farms and arguing the incentive would create a new market for feedstock.

Safety and technical questions drew sustained committee attention. Representative Preston described fuel-contamination concerns he has seen in biodiesel and asked witnesses about microbial growth, water absorption and impacts on filters and engines. Delta and other witnesses said federal regulators and engine manufacturers use testing and standards to approve SAF blends and that industry and airport operators have processes to monitor and manage fuel quality.

Representative Alexander asked why implementation would be housed at EGLE, the state environmental agency; witnesses said EGLE has been involved in outreach and would be capable of administering the program. Multiple members asked about federal interactions; witnesses said the program could be combined with federal incentives and that federal aviation authorities set performance and safety standards for fuel.

A substitute bill (H-1) for HB 44-25 was adopted by roll call before the public testimony portion; the clerk recorded the adoption as 17 yes, 0 no, 0 pass and the substitute was announced as adopted.

What’s next: The committee did not record a final vote on both bills during the hearing. Sponsors and supporters urged committee approval and signaled they would work with agencies and stakeholders on program details, including safety protocols, feedstock definitions and how credits would flow to producers and blenders.

Ending: The record shows broad support from airlines, fuel associations and farm groups and sustained technical questioning from committee members. Committee staff will post written testimony and the bill text on the committee website for members and the public.