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Senate subcommittee hears stark split over governor's sustainable aviation fuel tax credit
Summary
Experts and analysts warned the proposed $1'$2-per-gallon SAF tax credit would be costly, risk shifting renewable diesel to aviation and reduce transportation revenue; the administration and industry said it would help decarbonize aviation and preserve refinery jobs. Public comment split sharply between environmental groups opposing the credit and unions and refinery advocates supporting it.
A California Senate budget subcommittee on Thursday heard sharply contrasting views on the governor's proposal to create a $1 to $2 per gallon tax credit for sustainable aviation fuel sold for use in California from 2026 through 2036.
Aaron Smith, a professor at the University of California, Berkeley, told the panel that while the credit would likely spur much more SAF production than the administration projects, it would be expensive for the state and for motorists. "SAF is expensive to produce and would generate few benefits for the climate if incentivized through this particular tax credit," Smith said, arguing most additional SAF would displace renewable diesel rather than add new low-carbon fuel.
The Legislative Analyst's Office also recommended rejecting the plan, citing a high cost per ton of greenhouse gas reduced, uncertainty about…
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