Michigan Legislators Propose Tax Credits for Sustainable Aviation Fuels
Key Ideas
- Michigan legislators are considering bills to offer tax credits for sustainable aviation fuels, blending traditional jet fuel with biomass and hydrogen propellants.
- The proposed tax credits aim to reduce carbon dioxide emissions in aviation, with incentives for aviation companies to use fuels produced from organic materials.
- While there is bipartisan support for the bills, opposition arises from concerns about distorting the market and diverting funds from other transportation solutions.
Michigan legislators are currently deliberating on a set of bills that aim to establish tax credits for the production and use of sustainable aviation fuels. Sponsored by Rep. Jerry Neyer and Sen. Joe Bellino, the proposed legislation offers incentives for blending traditional jet fuel with propellants sourced from biomass like corn, soybeans, cover crops, forestry residue, and even hydrogen. These tax credits would grant farmers an additional revenue stream and promote the growth of ethanol production facilities and fuel blending facilities in the state.
The tax credit program would provide a rebate on fuel blends that reduce carbon dioxide emissions by 50% compared to regular jet fuel, with additional incentives for further reductions. The goal is to encourage the aviation industry to switch to cleaner fuels and contribute to the reduction of CO2 emissions. The program is designed to be open to aviation companies voluntarily, without mandating their participation.
While the bills have garnered bipartisan support from organizations like Clean Fuels Michigan and the Corn Growers of Michigan, there is opposition from some lawmakers and environmental advocates. Concerns have been raised about the potential distortion of the market and the allocation of state funds towards sustainable aviation fuels rather than other lower-emission transportation solutions.
The proposed legislation has sparked discussions on the trade-off between environmental benefits and economic incentives, with proponents viewing it as an investment in sustainability and opponents cautioning against false climate solutions. Despite differing opinions, the bills reflect a rare bipartisan collaboration between the Democratic-led Senate and the Republican-led House in Michigan.
As the legislative process unfolds, with the House and Senate yet to hold a vote on the bills, the outcome remains uncertain. Rep. Neyer anticipates a delay in the House vote until after the state budget is finalized. However, given the interest and support in the Senate, the legislation stands a good chance of progressing towards implementation.