US Inflation Reduction Act Sparks Sustainable Aviation Investment
The US Inflation Reduction Act has introduced tax credits and grants to promote the use of sustainable aviation fuel (SAF). These measures are already making a positive impact on investment, according to Ed Bastian, the CEO of Delta Air Lines.
Signed into law by President Joe Biden on August 16, 2022, the act is starting to show its effects. Bastian expressed his observations during a Wings Club event in New York on May 17, stating that conversations with energy producers have taken a different turn due to the incentives.
Bastian emphasizes the importance of attracting capital to enable the widespread adoption of SAF and biofuels. He believes that until a reliable source of capital is available, the energy producers and developers are uncertain about finding customers at the current cost of production and limited scale.
The incentives provided by the Inflation Reduction Act, as noted by Bastian, allow governments to bring producers and consumers together for the collective benefit of a sustainable future. The act's provisions were the result of significant efforts by the aviation industry in lobbying on Capitol Hill.
Delta is actively working at the state level to introduce similar tax incentives in local governments. This is primarily due to the challenges associated with transporting biofuels, as they need to be consumed close to their production source and cannot be transported through pipelines.
Bastian is pleased to see a positive response and a change in attitude toward SAF incentives at the state level, particularly in Minnesota, Michigan, and Atlanta. By combining these local incentives with the federal mandate, Delta aims to foster a supportive environment for SAF adoption.
Delta Air Lines recognizes the value of the incentives provided by the Inflation Reduction Act and is working both at the federal and state levels to promote the use of SAF, overcome transportation challenges, and encourage a sustainable future for the aviation industry.