Lawmakers consider $2.50 per‑gallon in‑state incentive to spur sustainable aviation fuel production

A coalition of airlines, trade groups and local governments told the Assembly Committee on Growth and Infrastructure on April 8 that Assembly Bill 481 would help make Nevada a hub for sustainable aviation fuel (SAF) production and uplift.

Ruben Zaragoza, Southwest Airlines’ state and local affairs director, said Southwest uses about 140 million gallons of jet fuel annually for flights departing Nevada and described SAF as “a drop‑in fuel” that can be used with existing aircraft and infrastructure. He and other presenters said SAF currently costs two to three times conventional jet fuel because of feedstock and processing costs.

Airlines’ trade group Airlines for America (A4A), represented by Sean Newsom, said federal and state incentives are crucial to bridge the price gap and scale U.S. SAF production. Newsom pointed to Illinois’ program as an example that attracted recurring SAF deliveries and said Nevada could retain fuels produced in the state rather than seeing them diverted to other markets.

Tom Clark and Ruben Zaragoza said the bill’s conceptual amendment makes two key design choices: (1) to focus the incentive on SAF produced in Nevada (the amendment removes a prior dollar‑per‑gallon incentive for out‑of‑state SAF), and (2) to target uplifted gallons — the policy provides a $2.50 per‑gallon incentive for SAF uplifted into aircraft in Nevada. The bill would create a SAF incentive fund administered by the state treasurer and asks for an initial pilot allocation of $10 million. Clark said the program is expected to be a pilot and that it may not be implemented until 2026–27 as SAF production capacity scales.

Supporters included the Vegas Chamber and the Nevada Association of Counties, which said incentives could attract carriers and flights to rural airports and support economic development. Airlines argued the program would reduce lifecycle emissions and economic leakage by keeping SAF in Nevada as production grows.

Allegiant Air testified neutral, noting SAF’s importance and the need for a policy framework that addresses production scalability, infrastructure and cost parity with conventional jet fuel. No opposition testimony was recorded in the hearing.

Committee members asked about the source and availability of SAF feedstocks and about whether airlines can use existing aircraft and infrastructure. Witnesses confirmed modern aircraft can use drop‑in SAF today, and they cited Department of Energy analyses and industry studies indicating long‑term feedstock potential and planned production facilities in Nevada.

No committee vote was recorded during the hearing. Sponsors and industry representatives said they will continue stakeholder work as the bill proceeds.