US Sustainable Aviation Fuel Production Hits Record, Faces Uncertainty Ahead of Policy Changes
U.S. sustainable aviation fuel (SAF) production has surged to a record 196 million gallons through November 2025, up from 39 million in 2024, according to the EPA. However, uncertainty surrounding new biofuel tax credits and delayed regulatory updates could hinder future growth, as the expiration of the Inflation Reduction Act's SAF tax credit and high SAF prices compared to petroleum jet fuel pose challenges for producers.
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US sustainable aviation fuel (SAF) production reached a record 196 million USG through November 2025, up from 39 million USG in 2024, according to the US Environmental Protection Agency (EPA). However, uncertainty regarding new biofuel tax credits and delayed regulatory clarity may impact future growth.
The Inflation Reduction Act's SAF tax credit expired in 2024, removing a $1.25/USG subsidy. The EPA expects to finalize new regulations in Q2 2026, while interim guidance may come sooner. SAF producers are already selling 45Z credits at a discount due to market conditions.
The EPA anticipates increasing the biofuel blending mandate, which could support SAF margins. Additionally, various states offer tax credits to incentivize SAF production, but federal policy uncertainty hampers development.
The oldest US SAF producer, World Energy, idled its facility in California, while XCF Global's Nevada plant shifted to renewable diesel. SAF prices remain high compared to petroleum jet fuel, limiting domestic uptake without new policies.
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