MADISON, WI — Wisconsin is poised to become a hub for Sustainable Aviation Fuel (SAF) production with a new legislative proposal introduced on April 3, 2025, by State Representative David Steffen (R-Howard) and State Senators Romaine Quinn (R-Birchwood) and Patrick Testin (R-Stevens Point). The bill offers a $1.50 per gallon income and franchise tax credit for SAF produced in Wisconsin, starting in 2028, to bolster the state’s $4.2 billion biofuels industry, which employs over 19,000 people. By leveraging Wisconsin’s agricultural and timber resources, the legislation aims to create a robust market for renewable feedstocks, particularly low-value energy crops, while supporting rural economies and sustainable energy innovation.

SAF, a drop-in jet fuel derived from renewable sources like biomass and agricultural residues, must achieve at least a 50% reduction in lifecycle greenhouse gas (GHG) emissions compared to conventional jet fuel to qualify for federal incentives, such as the Inflation Reduction Act’s SAF credit of $1.25 to $1.75 per gallon. Wisconsin’s proposed credit complements this federal framework, requiring that at least 90% of the fuel be derived from renewable sources and that feedstocks be grown domestically. “Wisconsin’s geographic location coupled with its strong agriculture industry perfectly positions our state to be a leader in producing Sustainable Aviation Fuel,” said Rep. Steffen, emphasizing the dual benefits of economic growth and environmental sustainability.

The proposal comes at a time when SAF production is gaining traction globally, with the International Air Transport Association estimating a need for 7.9 billion liters by 2025 to meet net-zero emissions goals by 2050. Wisconsin’s initiative mirrors efforts in other states. Minnesota, for instance, offers a $1.50 per gallon SAF tax credit for fuel produced or blended in-state between July 1, 2024, and June 30, 2030, requiring biomass-derived SAF to meet similar GHG reduction thresholds. Illinois provides a $1.50 per gallon use tax credit for air carriers purchasing SAF through 2032, with a temporary allowance for waste-derived fuels until 2028. These state-level incentives build on federal support, including the U.S. Department of Energy’s goal to scale SAF production to 3 billion gallons annually by 2030.

“Wisconsin’s geographic location coupled with its strong agriculture industry perfectly positions our state to be a leader in producing Sustainable Aviation Fuel—which is a big win for Wisconsin farmers and timber producers.” — Rep. David Steffen

Confirmed SAF projects in other states highlight the industry’s momentum. In Texas, Project Roadrunner, backed by Breakthrough Energy Catalyst, Citi, and American Airlines, is developing a facility to convert waste carbon dioxide and renewable power into SAF and other low-carbon fuels. California’s Low Carbon Fuel Standard (LCFS) supports SAF production through credit generation, with proposed amendments to penalize fossil jet fuel use in intrastate flights starting in 2028, further incentivizing SAF adoption. While Wisconsin currently lacks SAF production facilities, legislators see the tax credit as a catalyst to attract investment and infrastructure development.

Sen. Quinn underscored the economic potential, stating, “The sustainable aviation fuel tax credit is a great way for Wisconsin to support its farmers and timber producers by growing our biofuels industry.” Sen. Testin, chair of the Senate Committee on Agriculture and Revenue, added, “It’s no secret that farmers and timber producers have been facing economic challenges for a while. If we can become the national leader in Sustainable Aviation Fuel production, it will help us better preserve our natural resources and bolster our state’s agriculture industry.” The bill is currently circulating for co-sponsorship, with a deadline of April 16, 2025, before advancing in the legislative process.

Challenges remain, including SAF’s higher production costs compared to renewable diesel and the need for robust supply chains. However, Wisconsin’s strategic focus on low-value crops and timber aligns with federal climate-smart agriculture initiatives, which could enhance GHG emissions reductions through practices like cover cropping and reduced tillage. As the U.S. aims for 35 billion gallons of SAF annually by 2050, Wisconsin’s tax credit positions the state to play a pivotal role in decarbonizing aviation while revitalizing its rural economy.

Source

• Wisconsin Legislature Press Release, April 3, 2025: “Legislators Target New Economy with Sustainable Aviation Fuel”

• Minnesota Department of Agriculture: Sustainable Aviation Fuel Tax Credit

• Illinois Department of Revenue: Aviation Fuel Sales and Use Tax

• Reuters: Policies and Incentives Support Sustainable Aviation Fuels

Excerpt

Wisconsin’s proposed $1.50 per gallon tax credit for Sustainable Aviation Fuel production, effective from 2028, aims to transform the state into a national SAF hub, leveraging its agricultural and timber resources to drive economic and environmental benefits.