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Triple committee defers action on sustainable aviation fuel tax credit after extensive testimony and questions
Summary
Committees heard hours of testimony for SB 2027, a proposed tax credit to encourage sustainable aviation fuel (SAF). Airlines and industry groups said the credit would help close a $4–$5 per‑gallon cost gap; opponents warned about lifecycle emissions and subsidy risks. With local production limited and many operational questions unanswered, committees deferred action pending further information.
Senate Bill 2027 would establish a state tax credit for sustainable aviation fuel (SAF) to help close the cost gap between conventional jet fuel and SAF and accelerate supply.
Proponents including the Hawaii Renewable Fuels Coalition, Alaska and Hawaiian Airlines, and Pono Pacific said the credit could help spur local production and importation to reduce aviation emissions. Airline representatives said current SAF availability is very limited (they estimated SAF use at roughly 0–1% of fuel on their operations) and described a per‑gallon cost gap they estimated at about $4–$5 that state incentives could help close.
Opponents including the Energy Justice Network and other environmental witnesses argued that some SAF pathways may produce worse lifecycle emissions and urged investment in electrification and other strategies instead of biofuel subsidies. A whistleblower witness urged caution and asked the committee to include administrative safeguards in credit administration so firms with outstanding tax problems could not claim large credit windfalls.
Committee members pressed for concrete cost estimates for passengers and local job impacts; DOTAX said administering the credit would present systems and capacity issues and recommended clarifications. Members also raised questions about feedstock acreage and whether local agriculture could supply more than a small percentage of needs (estimates discussed in committee ranged from 4% to 10% local production). Given outstanding questions and the existence of a House companion bill, the chairs deferred action on SB 2027.
