II 

117TH CONGRESS 

1ST SESSION S. 2263 

To amend the Internal Revenue Code of 1986 to provide a tax credit for 

sustainable aviation fuel, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 24, 2021 

Mr. BROWN (for himself, Ms. CANTWELL, Mr. WARNOCK, and Mrs. MURRAY) 

introduced the following bill; which was read twice and referred to the 

Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

a tax credit for sustainable aviation fuel, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Sustainable Skies 

5 Act’’. 

6 SEC. 2. SUSTAINABLE AVIATION FUEL CREDIT. 

7 (a) IN GENERAL.—Subpart D of part IV of sub8 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 is amended by inserting after section 40A the fol2 lowing new section: 

3 ‘‘SEC. 40B. SUSTAINABLE AVIATION FUEL CREDIT. 

4 ‘‘(a) IN GENERAL.— 

5 ‘‘(1) CREDIT AMOUNT.—For purposes of sec6 tion 38, the sustainable aviation fuel credit for the 

7 taxable year is, with respect to each gallon of sus8 tainable aviation fuel which is used by the taxpayer 

9 in the production of a qualified mixture— 

10 ‘‘(A) a base credit amount of $1.50, plus 

11 ‘‘(B) the applicable supplementary credit 

12 amount. 

13 ‘‘(2) APPLICABLE SUPPLEMENTARY CREDIT

14 AMOUNT.— 

15 ‘‘(A) IN GENERAL.—For purposes of para16 graph (1), the applicable supplementary credit 

17 amount is $0.01 for every percentage point 

18 above 50 percent for which the sustainable avia19 tion fuel is certified under subsection (f) to re20 duce emissions in comparison with petroleum21 based jet fuel as described in subsections 

22 (d)(2)(A) or (d)(2)(B). 

23 ‘‘(B) MAXIMUM SUPPLEMENTARY CREDIT

24 AMOUNT.—For purposes of subparagraph (A), 


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1 the maximum applicable supplementary credit 

2 amount allowable is $0.50. 

3 ‘‘(3) 40A EXCEPTION.—If the biodiesel fuels 

4 credit under section 40A is not in effect for a tax5 able year, paragraph (1)(A) shall by applied by sub6 stituting ‘$1.15’ for ‘$1.50’. 

7 ‘‘(b) QUALIFIED MIXTURE.—For purposes of this 

8 section, the term ‘qualified mixture’ means a mixture of 

9 sustainable aviation fuel and kerosene, which— 

10 ‘‘(1) is sold by the taxpayer producing such 

11 mixture for use in an aircraft that has fuel uplift in 

12 the United States, or 

13 ‘‘(2) is used— 

14 ‘‘(A) by the taxpayer producing such mix15 ture, and 

16 ‘‘(B) in an aircraft that has fuel uplift in 

17 the United States. 

18 ‘‘(c) SALE OR USE MUST BE IN TRADE OR BUSI19 NESS, ETC.—Sustainable aviation fuel used in the produc20 tion of a qualified mixture shall be taken into account— 

21 ‘‘(1) only if the sale or use described in sub22 section (b) is in a trade or business of the taxpayer, 

23 and 

24 ‘‘(2) for the taxable year in which such sale or 

25 use occurs. 


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1 ‘‘(d) SUSTAINABLE AVIATION FUEL.—For purposes 

2 of this section, the term ‘sustainable aviation fuel’ means 

3 liquid fuel— 

4 ‘‘(1) that— 

5 ‘‘(A) consists of synthesized hydrocarbons, 

6 ‘‘(B) meets the requirements of— 

7 ‘‘(i) ASTM International Standard 

8 D7566, or 

9 ‘‘(ii) the Fischer Tropsch provisions of 

10 ASTM International Standard D1655, 

11 Annex A1, 

12 ‘‘(C) is derived from biomass (as such term 

13 is defined in section 45K(c)(3)), waste streams, 

14 renewable energy sources, or gaseous carbon ox15 ides, and 

16 ‘‘(D) is not derived from palm fatty acid 

17 distillates, and 

18 ‘‘(2) that achieves at least a 50 percent lifecycle 

19 greenhouse gas emissions reduction in comparison 

20 with petroleum-based jet fuel, as determined by a 

21 test that shows— 

22 ‘‘(A) the fuel production pathway achieves 

23 at least a 50 percent reduction of the aggregate 

24 attributional core lifecycle emissions and the 

25 positive induced land use change values under 


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1 the lifecycle methodology for sustainable avia2 tion fuels adopted by the International Civil 

3 Aviation Organization with the agreement of 

4 the United States, or 

5 ‘‘(B) the fuel production pathway achieves 

6 at least a 50 percent reduction of the aggregate 

7 attributional core lifecycle greenhouse gas emis8 sions values and the positive induced land use 

9 change values under another methodology that 

10 the Secretary, in consultation with the Adminis11 trator of the Environmental Protection Agency 

12 and the Secretary of Energy working jointly, 

13 determines is— 

14 ‘‘(i) reflective of the latest scientific 

15 understanding of lifecycle greenhouse gas 

16 emissions, and 

17 ‘‘(ii) as stringent as the requirement 

18 under subparagraph (A). 

19 ‘‘(e) TIME LIMIT FOR ADOPTION OF NEW SUSTAIN20 ABLE AVIATION FUEL EMISSIONS REDUCTION TEST.— 

21 For purposes of subparagraph (B) of subsection (d)(2), 

22 the Secretary, in consultation with the Administrator of 

23 the Environmental Protection Agency and the Secretary 

24 of Energy working jointly, shall, within 24 months after 

25 the date of the enactment of this section, adopt at least 


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1 one methodology for testing lifecycle greenhouse gas emis2 sions that meets the requirements of such subparagraph. 

3 ‘‘(f) CERTIFICATION REQUIREMENTS.— 

4 ‘‘(1) IN GENERAL.—No credit shall be allowed 

5 under subsection (a) unless the taxpayer meets cer6 tification requirements demonstrating the sustain7 able aviation fuel conforms with one of the lifecycle 

8 greenhouse gas emissions reduction tests under sub9 section (d)(2). 

10 ‘‘(2) CERTIFICATION REQUIREMENT FOR TEST

11 IN (D)(2)(A).—For purposes of paragraph (1), with 

12 respect to certifications based on the test under sub13 paragraph (A) of subsection (d)(2), the taxpayer 

14 shall obtain from the fuel producer a certification 

15 from a sustainability certification scheme approved 

16 by the International Civil Aviation Organization 

17 demonstrating that the fuel conforms with the Car18 bon Offsetting and Reduction Scheme for Inter19 national Aviation’s sustainability criteria and the 

20 traceability and information transmission require21 ments approved by the International Civil Aviation 

22 Organization with the agreement of the United 

23 States. 

24 ‘‘(3) CERTIFICATION REQUIREMENTS FOR TEST

25 IN (D)(2)(B).—For purposes of paragraph (1), with 


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1 respect to certifications based on the test under sub2 paragraph (B) of subsection (d)(2)— 

3 ‘‘(A) the taxpayer shall obtain from the 

4 fuel producer a certification that the fuel has 

5 been determined by the Environmental Protec6 tion Agency to qualify under the requirements 

7 of such subparagraph, and 

8 ‘‘(B) the taxpayer shall obtain from the 

9 fuel producer an additional certification that 

10 the fuel conforms with the sustainability criteria 

11 and the traceability and information trans12 mission requirements that the Secretary, in 

13 consultation with the Administrator of the En14 vironmental Protection Agency and the Sec15 retary of Energy working jointly, determines 

16 are equivalent with those necessary to claim 

17 emissions reductions from sustainable aviation 

18 fuel use under the Carbon Offsetting and Re19 duction Scheme for International Aviation 

20 adopted by the International Civil Aviation Or21 ganization with the agreement of the United 

22 States. 

23 ‘‘(g) TERMINATION.—This section shall not apply to 

24 any sale or use after December 31, 2031.’’. 


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1 (b) CREDIT MADE PART OF GENERAL BUSINESS

2 CREDIT.—Section 38(b) of the Internal Revenue Code of 

3 1986 is amended by striking ‘‘plus’’ at the end of para4 graph (32), by striking the period at the end of paragraph 

5 (33) and inserting ‘‘, plus’’, and by inserting after para6 graph (33) the following new paragraph: 

7 ‘‘(34) the sustainable aviation fuel credit deter8 mined under section 40B.’’. 

9 (c) CONFORMING AMENDMENT.—Section 40A(f) of 

10 such Code is amended by striking paragraph (4). 

11 (d) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to taxable years ending after the 

13 date of the enactment of this Act. 

Æ 


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