What's happening
This bill creates a tax credit for producing sustainable aviation fuel in New York and requires state planning for its increased use.
Why it matters
The bill provides significant financial incentives (up to $2.4 million per taxpayer per year) for producing or blending sustainable aviation fuel (SAF) in New York, potentially attracting new investment, spurring job creation, and supporting the growth of a green fuel industry within the state.
To qualify for the tax credit, SAF must achieve at least a 50% reduction in lifecycle greenhouse gas emissions compared to traditional jet fuel, ensuring that public funds are targeted toward fuels that meaningfully address climate goals.
The law gives preference to SAF made from certain U.S.-grown feedstocks (notably corn and soybean), which could benefit local agriculture but may also shape which types of SAF are economically viable and influence broader agricultural and land-use policies.
By requiring state climate planning bodies to account for SAF production and the impact of these incentives, the bill aims to integrate aviation fuel decarbonization into New York’s broader climate strategy—potentially shaping how the state measures and manages its progress toward emissions reduction targets.
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Who cares
New York sustainable aviation fuel producers
The bill would offer refundable credits of $1.25 per gallon of certified fuel, or $1.50 for qualifying mixtures, capped at $2.4 million per taxpayer per taxable year.
Domestic corn and soybean growers
Fuel made with a minimum amount of domestically grown corn or soybean feedstock, set by NYSERDA, could qualify for the higher credit.
NYSERDA
The authority would certify eligible fuels, verify at least a 50 percent lifecycle greenhouse gas emissions reduction and determine producers’ eligible credit amounts.
Climate Action Council
The council would have to incorporate increased sustainable aviation fuel production and use, and the credit’s impact on both, into its next updated scoping plan.
Headline styles
Create Aviation Fuel Tax Credit
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to energy and telecommunications
- Referred to energy and telecommunications
Full text
6 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
1229
2025-2026 Regular Sessions
IN SENATE
January 8, 2025
Introduced by Sen. MAY -- read twice and ordered printed, and when printed to be committed to the Committee on Energy and Telecommunications
AN ACT to amend the energy law and the tax law, in relation to establishing a sustainable aviation fuel tax credit; to amend the environmental conservation law, in relation to directing the climate action council to incorporate the use of sustainable aviation fuel in its updated scoping plan; and providing for the repeal of such provisions upon expiration thereof
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The energy law is amended by adding a new section 5-129 to read as follows:
§ 5-129. Sustainable aviation fuel certification. 1. For the purposes of this section, the following terms shall have the following meanings:
(a) "Applicable material" means (i) monoglycerides, diglycerides, and triglycerides; (ii) free fatty acids; and (iii) fatty acid esters.
(b) "ASTM" means the American Society for Testing and Materials, which is a private organization that utilizes committees of industry representatives and regulators to develop product quality standards and test methods to be used by industries, regulatory agencies, and purchasing agents.
(c) "Authority" means the New York state energy research and development authority.
(d) "Aviation gasoline" means any gasoline that is used to produce or generate power for propelling internal combustion engine aircraft, including but not limited to, any gasoline that is:
(i) invoiced and billed by a producer, manufacturer, refiner, or blender to a distributor or dealer, by a distributor to a dealer or consumer, or by a dealer to consumer, as "aviation gasoline" that meets specifications in ASTM specification D910-16 or any other ASTM specification
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03212-01-5
as gasoline appropriate for use in producing or generating power for propelling internal combustion engine aircraft; or
(ii) sold to a dealer of aviation gasoline for dispensing directly into the fuel tank of an aircraft.
(e) "Biomass" means any organic material other than:
(i) oil or natural gas, or any product thereof; or
(ii) coal (including lignite) or any product thereof.
(f) "Certified sustainable aviation fuel" means a sustainable aviation fuel certified as such by the authority pursuant to the provisions of this section.
(g) "Certified qualifying SAF mixture" means a qualifying SAF mixture certified as such by the authority pursuant to the provisions of this section.
(h) "Commissioner" means the president of the New York state energy research and development authority.
(i) "Dealer" means any entity, except a distributor, engaged in the business of buying and selling gasoline and/or other petroleum products in this state.
(j) "Distributor" means any entity that (i) receives petroleum products in New York state for storage and subsequent distribution by tank car or tank truck or both; (ii) produces, manufactures, or refines petroleum products in this state; or (iii) imports petroleum products into this state via boat, barge, or pipeline for storage and subsequent delivery at or further transportation from boat, barge, or pipeline terminals in New York state.
(k) "Jet fuel" means blends of hydrocarbons derived from crude petroleum, natural gasoline, and synthetic hydrocarbons, intended for use in aviation turbine engines, and that meet the specifications in ASTM specification D1655-12.
(l) "Lifecycle greenhouse gas emissions reduction percentage" means, with respect to any sustainable aviation fuel, the percentage reduction in lifecycle greenhouse gas emissions achieved by such fuel as compared with petroleum-based jet fuel, as defined in accordance with:
(i) The most recent Carbon Offsetting and Reduction Scheme for International Aviation which has been adopted by the International Civil Aviation Organization with the agreement of the United States; or
(ii) Any similar methodology which satisfies the criteria under section 211(o)(1)(H) of the Clean Air Act (42 U.S.C. 7545(o)(1)(H)), as in effect on the effective date of this section.
(m) "Qualifying SAF mixture" means a sustainable aviation fuel, where the biomass used as feedstock in the production of such sustainable aviation fuel is derived from domestically grown corn and/or soybean in a minimum amount as determined by the authority.
(n) "Sustainable aviation fuel" or "SAF" means liquid fuel, the portion of which is not kerosene, which:
(i) meets the requirements of:
(A) ASTM International Standard D7566; or
(B) The Fischer Tropsch provisions of ASTM International Standard D1655, Annex A1;
(ii) is (1) not derived from co-processing an applicable material, or materials derived from an applicable material; and (2) derived with a feedstock which is biomass;
(iii) is not derived from palm fatty acid distillates or petroleum; and
(iv) has been certified as having a lifecycle greenhouse gas emissions reduction percentage of at least fifty percent under paragraph (c) of subdivision three of this section.
(o) "SAF producer" means an entity engaged in the business of producing sustainable aviation fuel and/or blending sustainable aviation fuel with aviation gasoline or jet fuel.
2. The commissioner shall develop a method by which SAF producers may apply to the authority to have certain sustainable aviation fuels produced by such SAF producers certified as certified sustainable aviation fuel and/or certified qualifying SAF mixtures for the purposes of receiving the sustainable aviation fuel credit under section fifty of the tax law. The commissioner shall determine any evidence that shall be required to be submitted to the authority in support of such applications.
3. To be certified under this section as a certified sustainable aviation fuel, a sustainable aviation fuel shall be:
(a) produced in New York state or blended with aviation gasoline or jet fuel in New York state;
(b) sold in New York state to a purchaser who certifies that the sustainable aviation fuel is for use as fuel in an aircraft departing from an airport in New York state; and
(c) certified by the authority as having a lifecycle greenhouse gas emissions reduction percentage of at least fifty percent.
4. (a) A SAF producer seeking certification of sustainable aviation fuel and/or a qualifying SAF mixture under this section shall submit an application under subdivision two of this section within one month of the close of its taxable year for all such sustainable aviation fuel and/or qualifying SAF mixtures for which such SAF producer is seeking certification.
(b) Within thirty days of receiving an application for certification of sustainable aviation fuel and/or qualifying SAF mixtures under this section, the authority shall:
(i) issue a certification for such sustainable aviation fuel and/or qualifying SAF mixture;
(ii) request additional information from the SAF producer; or
(iii) reject such application for certification.
(c) Where the authority requests additional information from a SAF producer under subparagraph (ii) of paragraph (b) of this subdivision, the authority shall issue certification or reject the application within thirty days of receiving such additional information. Where such SAF producer fails to submit such additional information within thirty days of such request, such application for certification shall be deemed rejected.
5. (a) A certification issued under this section shall include (i) the fiscal year for which such certification is issued; (ii) the amount of credit for which the SAF producer is eligible under section fifty of the tax law pursuant to such certification; and (iii) the taxable year for which the SAF producer may claim the tax credit under section fifty of the tax law.
(b) A certification for a sustainable aviation fuel issued under this section shall be applicable to either blending or producing such sustainable aviation fuel, but shall not entitle the SAF producer to separate credits under section fifty of the tax law for both blending and producing the same sustainable aviation fuel.
6. The commissioner is hereby authorized to promulgate any rules and/or regulations necessary to effectuate the provisions of this section.
§ 2. The tax law is amended by adding a new section 50 to read as follows:
§ 50. Sustainable aviation fuel credit. (a) Allowance of credit. A taxpayer subject to tax under article nine, nine-a, or twenty-two of this chapter shall be allowed a credit against such tax pursuant to the provisions referenced in subdivision (d) of this section. The credit (or pro rata share of earned credit in the case of a partnership) for each gallon of certified sustainable aviation fuel produced at a sustainable aviation fuel plant on or after January first, two thousand twenty-seven shall equal one dollar and twenty-five cents per gallon of certified sustainable aviation fuel; provided, however, that if such certified sustainable aviation fuel is a certified qualifying SAF mixture, such credit (or pro rata share of earned credit in the case of a partnership) for each gallon of such certified sustainable aviation fuel produced at a sustainable aviation fuel plant on or after January first, two thousand twenty-seven shall equal one dollar and fifty cents per gallon. The credit under this section shall be capped at two million four hundred thousand dollars per taxpayer per taxable year. If the taxpayer is a partner in a partnership or shareholder of a New York S corporation, then the cap imposed by the preceding sentence shall be applied at the entity level, so that the aggregate credit allowed to all the partners or shareholders of each such entity in the taxable year does not exceed two million four hundred thousand dollars. The tax credit allowed pursuant to this section shall apply to taxable years beginning January first, two thousand twenty-seven through January first, two thousand thirty-two, inclusive.
(b) Definitions. For the purposes of this section, the following terms shall have the following meanings:
(1) "Certified sustainable aviation fuel" shall mean a sustainable aviation fuel certified as such under section 5-129 of the energy law.
(2) "Certified qualifying SAF mixture" shall mean a qualifying SAF mixture certified as such under section 5-129 of the energy law.
(3) "Qualifying SAF mixture" shall have the same meaning as defined by section 5-129 of the energy law.
(4) (i) "Sustainable aviation fuel" or "SAF" shall have the same meaning as defined by section 5-129 of the energy law.
(5) "Sustainable aviation fuel plant" means a commercial facility located in New York state at which one or more sustainable aviation fuels are produced.
(c) Reporting requirements. A taxpayer wishing to claim a credit under this section shall submit to the commissioner (1) the certification received for certified sustainable aviation fuel under section 5-129 of the energy law; and (2) any other information deemed necessary by the commissioner.
(d) Cross-references. For application of the credit provided for in this section, see the following provisions of this chapter:
(1) article 9: section 187-s.
(2) article 9-A: section 210-B, subdivision 61.
(3) article 22: section 606, subsection (www).
§ 3. The tax law is amended by adding a new section 187-s to read as follows:
§ 187-s. Sustainable aviation fuel credit. 1. Allowance of credit. A taxpayer shall be allowed a credit to be computed as provided in section fifty of this chapter against the tax imposed by this article. Provided, however, that the amount of such credit allowed against the tax imposed by section one hundred eighty-four of this article shall be the excess of the amount of such credit over the amount of any credit allowed by this section against the tax imposed by section one hundred eighty-three of this article.
2. Application of credit. In no event shall the credit under this section be allowed in an amount which will reduce the tax payable to less than the applicable minimum tax fixed by section one hundred eighty-three of this article. If, however, the amount of the credit allowed under this section for any taxable year reduces the tax to such amount, the excess shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this chapter. Provided, however, the provisions of subsection (c) of section one thousand eighty-eight of this chapter notwithstanding, no interest shall be paid thereon.
§ 4. Section 210-B of the tax law is amended by adding a new subdivision 61 to read as follows:
61. Sustainable aviation fuel credit. (a) Allowance of credit. A taxpayer shall be allowed a credit, to be computed as provided in section fifty of this chapter, against the taxes imposed by this article.
(b) Application of credit. The credit allowed under this subdivision for the taxable year shall not reduce the tax due for such year to less than the amount prescribed in paragraph (d) of subdivision one of section two hundred ten of this article. However, if the amount of credit allowed under this subdivision for the taxable year reduces the tax to such amount or if the taxpayer otherwise pays tax based on the fixed dollar minimum amount, any amount of credit thus not deductible in such taxable year shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section one thousand eighty-six of this chapter. Provided, however, the provisions of subsection (c) of section one thousand eighty-eight of this chapter notwithstanding, no interest shall be paid thereon.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the energy law and the tax law, in relation to estab- lishing a sustainable aviation fuel tax credit; to amend the environ- mental conservation law, in relation to directing the climate action council to incorporate the use of sustainable aviation fuel in its updated scoping plan; and providing for the repeal of such provisions upon expiration thereof
Purpose
The purpose of this bill is to ensure that the Federal Sustainable Aviation Fuel (SAF) tax credit created by the Inflation Reduction Act, and which expired on January 1, 2025, will be continued in New York State as a state tax credit. Such continuation will encourage the expanded production and use of SAF in New York. It will also signif- icantly further our state's climate mitigation efforts by reducing greenhouse gas emissions in the aviation sector.
Summary of specific provisions
Section 1. A new section 5-129 is added to the energy law to define terms related to the creation of the Sustainable Aviation Credit (SAF). Importantly, the bill defines "Qualifying SAF mixture" as one where the biomass used as feedstock in the production of such SAF is derived from domestically grown corn and/or soybean in a minimum amount as determined by the authority (NYSERDA). **The qualifying feedstock does not have to come from New York State grown crops.
Read the full memo (981 words)
"Sustainable Aviation Fuel" is defined as a liquid fuel, the portion of which is not kerosene: meets certain international standards; is derived with a feedstock which is biomass; and which must have a minimum reduction in lifecycle greenhouse gas emissions of 50%.
"SAF Producer" is defined as an entity engaged in the business of producing SAF and/or blending SAF with aviation gasoline or jet fuel. The bill requires the commissioner of NYSERDA to develop a method by which producers of SAF may apply to have certain SAFs and/or SAF mixtures certified for the purpose of receiving the tax credit.
To be certified the SAF must be produced or blended in the State, sold in New York State to a purchaser who certifies that the SAF is for use as a fuel in an aircraft departing from an airport in New York State, and certified by NYSERDA as having a lifecycle greenhouse gas emissions reduction of at least 50%. The SAF producer seeking certification shall submit an application within one month of the close of its taxable year. NYSERDA shall, within 30 days of receipt of application, issue certif- ication, request additional information from producer, or reject appli- cation.
Section 2. The bill adds a new section 50 to the tax law to create the Sustainable aviation fuel tax credit and outline its allowance per gallon of SAF produced at an SAF plant on or after January 1, 2027 at a rate equal to one dollar at twenty-five cents and for a certified quali- fying SAF mixture a rate of one dollar and fifty cents. The credit under
this section shall be capped at two million four hundred thousand dollars per taxpayer per taxable year.
Sections 3, 4, 5 and 6 of the bill add new sections to the tax law, to allow a taxpayer a credit to be computed against the tax imposed by other articles in the tax code.
Section 7 of the bill adds a new subdivision 18 to section 75-0103 of the environmental conservation law to require the Climate Action Council to incorporate in its updated carbon reduction plan the effects of the increased production and use in the state of SAF and the impact that the SAF credit, created herein, has had on such production and use.
Justification
Aviation is one of the fastest-growing sources of the greenhouse gas emissions driving global climate change. In fact, if the entire aviation sector were a country, it would be one of the top 10 carbon-polluting nations on the planet. Emissions from aviation are a significant contributor to climate change because airplanes burn fossil fuel-based jet fuels which release CO2 emissions when burned. This burning in the atmosphere also contributes to planetary warming due to nitrogen oxides (NOx), vapor trails, and cloud formation triggered by the altitude at which aircraft operate.
To address and mitigate the negative climate impacts of aviation, the Inflation Reduction Act of 2022 (IRA) created a Sustainable Aviation Fuel (SAF) tax credit, which provided a federal incentive to producers of this biomass-based fuel. With the expiration of the credit program on January 1, 2025 there is now the threat of a reversal of gains made in the domestic commercial and private aircraft industry. Supplies in the United States of SAF are low and by extending the program as a state tax credit, SAF producers will be encouraged to continue to grow this busi- ness in New York while not relying on the use of New York's valuable farmland as the source of the feedstock for the fuel. Simply put, SAF is a liquid fuel that is derived from biomass crops like corn or soybeans, as defined, and reduces the life cycle of greenhouse gas emissions by at least 50%.
Many airlines have already pledged to use sustainable aviation fuel to reduce their carbon footprint, including United Airlines, Air France-KLM, Norwegian, British Airways, Delta Airlines, Virgin Airlines, Quantas, Japan Airlines, and Singapore Airlines, Alaska Airlines, Ameri- can Airlines, Finnair, and Qatar.
Minnesota has also enacted its own SAF tax credit in response to the expiration of the federal program, providing a state tax credit to qual- ifying taxpayers for producing or blending SAF with aviation, gasoline, or jet fuel in the state between July 2024 and June 30, 2030.
Legislative history
New bill
Fiscal implications
To be determined
Effective date
Immediately and shall apply to tax years beginning on or after January 1, 2027 and before January 1, 2033 and shall expire and be deemed repealed January 1, 2034.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.