A New Energy Landscape for Aviation
As global aviation faces increased scrutiny for its carbon footprint, a quiet yet potent revolution is taking shape across the United States. A shift in the levers of influence—from federal to state-level action—is beginning to redefine how low-carbon fuels, particularly Sustainable Aviation Fuel (SAF), are incentivized, developed, and deployed.
One of the most significant developments in this space is Michigan’s recent move to introduce targeted tax credits to catalyze SAF production. This legislation is notable not just for its financial support but for what it represents: a transition toward regional leadership in climate action, even as federal priorities remain fluid.
The Michigan Model: Pragmatic, Bipartisan, and Forward-Focused
The SAF tax incentive in Michigan offers producers and blenders the opportunity to benefit from $4.5 million in credits during the program’s inaugural year. This figure might seem modest, but it lays foundational infrastructure for future growth.
What makes this initiative particularly compelling is its bipartisan backing and emphasis on emissions and sustainability criteria. These features reflect a growing recognition that climate-smart policies can—and must—coexist with economic pragmatism and industry collaboration.
This move signals a shift in how policy ambition is being exercised. It also establishes Michigan as a testing ground for other states that may be waiting for a blueprint to follow.
SAF: A Mature Idea Ready for Scale
Sustainable Aviation Fuel has always held the promise of being a drop-in replacement for conventional jet fuel. Its compatibility with current aircraft and fueling systems makes it uniquely suited for rapid deployment. Derived from feedstocks such as agricultural waste, municipal solid waste, and captured carbon, SAF can slash lifecycle greenhouse gas emissions by at least 50 percent.
The science is clear. The technology is proven. What remains is a coordinated pathway to scale, and increasingly, that path is being forged at the state level.
Industry Growth Amid Regulatory Ambiguity
Even with federal uncertainty, private industry continues to expand SAF capacity:
- World Energy is on track to make its Paramount, California facility one of the largest SAF production sites in North America, targeting 250 million gallons per year.
- Gevo Inc. is building a state-of-the-art Net-Zero 1 facility in South Dakota, integrating renewable power and carbon capture to produce 60 million gallons annually.
- LanzaJet, headquartered in Illinois, is nearing completion of its Freedom Pines Fuels plant in Georgia, supported by strategic partnerships with Microsoft and the U.S. Department of Energy.
- Neste, a key global player, has significantly increased its U.S. presence through supply deals at major airports and a new terminal in Houston.
- Honeywell UOP and Chevron are expanding co-processing infrastructure, blending SAF production into existing operations.
Each of these examples illustrates how forward-looking companies are not waiting for federal alignment. They are moving ahead—with or without Washington.
A Federal Vacuum and Its Consequences
At the federal level, the signals have been mixed. While the Department of Energy did approve a $1.44 billion loan guarantee for Montana Renewables earlier this year, this gesture is offset by broader uncertainties. The suspension of clean energy tax incentives under the Inflation Reduction Act has disrupted investment planning for many developers.
Further complicating matters, the rebranding of SAF as “synthetic aviation fuel” in official communications has introduced terminological ambiguity. For an industry that relies on clarity around standards, definitions, and policy direction, such shifts can be destabilizing.
Moreover, while there has been rhetorical support for bio-based fuels benefiting rural economies and agriculture, there is no cohesive federal SAF roadmap. Without unified accounting standards or investment guarantees, the risk burden shifts disproportionately to the private sector and subnational actors.
States as Incubators of Clean Aviation
In this context, Michigan’s SAF program may serve as a bellwether. By establishing mechanisms that reward environmental performance and economic activity simultaneously, states are beginning to position themselves as laboratories of innovation.
California and Illinois already have SAF policies and infrastructure in motion. These regional ecosystems are creating valuable case studies in how to scale production, develop resilient supply chains, and stimulate demand through localized policies.
Importantly, the growth of SAF is not just a technological or environmental story—it is a story of governance. States that act decisively may find themselves rewarded not only with cleaner skies but also with increased economic competitiveness, investment inflows, and stronger aviation infrastructure.
What This Means for the Aviation Sustainability Ecosystem
This evolving policy landscape presents a unique opportunity for all actors in the sustainable aviation space—from airports and airlines to feedstock suppliers and technology developers.
With federal SAF credits in flux, long-term offtake agreements, public-private partnerships, and state-led frameworks are now emerging as risk mitigation strategies. For stakeholders who have been hesitant to invest, these subnational programs offer both stability and strategic clarity.
The narrative is no longer about waiting for federal green lights. It is about identifying where the lights are already green—and accelerating through them.
Conclusion: The Emergence of a Distributed SAF Future
The story of SAF in the United States is no longer a singular federal saga. It is a patchwork of state-led innovation, private sector ambition, and adaptive policy frameworks. As regional champions like Michigan step forward, a distributed yet interconnected SAF market begins to take shape.
This moment invites a recalibration of expectations. Instead of top-down mandates, we are seeing the rise of horizontal progress—where states, industries, and communities collaboratively shape the future of low-emission aviation.
For professionals working in transport decarbonization, these developments signal not just challenges, but profound opportunity. Strategic engagement with emerging state policies, thoughtful investment in resilient infrastructure, and advocacy for lifecycle emissions standards will shape the trajectory of aviation sustainability for decades to come.