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Senate panel hears sharp debate over proposed sustainable aviation fuel tax credit
Summary
Lawmakers, analysts and stakeholders clashed over a proposed $1–$2/gallon diesel‑excise tax credit for sustainable aviation fuel (SAF), weighing potential local road funding losses and uncertain climate benefits against refinery jobs and greater in‑state SAF supply.
The Senate Budget Subcommittee No. 4 on Friday took up the governor's proposal to provide a $1–$2 per gallon tax credit against the state diesel excise tax for sustainable aviation fuel sold into California through 2036. The Department of Finance said the credit would be tied to carbon intensity as determined by the California Air Resources Board and is intended to expand SAF production in the state.
Why it matters: The Legislative Analyst's Office urged rejection, saying the credit is an expensive and uncertain way to decarbonize aviation and could reduce diesel excise revenues that fund highway maintenance and local streets. LAO analyst Helen Kirschstein told the committee that annual revenue losses could range widely and, in…
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