America’s SAF opportunity: make policy work from forest to flight

IDEAS · POLICY ANALYSIS

America’s sustainable aviation fuel opportunity deserves a practical policy debate. The useful test is whether the rules help credible projects secure feedstock, finance construction and deliver qualifying fuel to customers.

That debate must include forestry. Forest owners, harvesting contractors, sawmills and the communities around them belong in the domestic bioeconomy conversation alongside crop and livestock producers. USDA’s National Institute of Food and Agriculture explicitly identifies SAF research using residues from forest operations and milling. USDA’s bioeconomy work

The opportunity is worth pursuing. The challenge is to make the route from a domestic resource to a commercial fuel project dependable enough to invest in.

Recognise the support already there

The federal position cannot fairly be described as abandoning biofuels. The 2025 tax legislation extended the Section 45Z clean fuel production credit through 31 December 2029. EPA also finalised renewable-fuel requirements for 2026 and 2027 in March, while presenting domestic production, farming and energy security as central objectives. IRS explanation and EPA’s final standards.

Those measures provide a foundation. Whether they produce the aviation fuel required depends on the details of each pathway and project.

The investment clock matters

The same tax legislation removed SAF’s preferential 45Z rate and restricted eligible feedstocks to those produced or grown in the United States, Canada or Mexico. These are enacted changes; the detailed implementing regulations are a separate matter.

In its 8 September 2026 update, the IRS described those regulations as under final consideration and issued further emissions-rate and transition guidance. DOE has also published a September revision of its 45ZCF-GREET emissions model. Implementation is progressing, although developers must use the applicable rules and model rather than rely on an earlier calculation. September IRS guidance and DOE’s model resources.

Our assessment is that two risks deserve attention. Removing SAF’s extra incentive could weaken its relative economics where other fuels offer better returns. And a credit ending in 2029 provides a limited operating window for a new plant still being developed. A project commissioning later cannot treat an extension as assured.

Neither point makes development futile. Both argue for financing assumptions that distinguish current law from hoped-for future support, and for policymakers to consider how incentive duration matches construction timelines.

Forestry needs a workable route

Forestry is already recognised in federal fuel policy. Under the Renewable Fuel Standard, EPA identifies qualifying slash and pre-commercial thinnings from non-federal forestland that is not ecologically sensitive. Its guidance also requires records demonstrating eligibility. EPA’s forestry-feedstock guidance.

This is not a blanket approval for every load of wood. Nor does eligibility under the RFS automatically establish eligibility under 45Z. Land origin, material classification, the conversion pathway and the requirements of each programme matter.

The practical risk is treating a large regional biomass resource as if it were already a contracted, qualifying feedstock supply. That can lead to expensive redesign or a shortfall in expected revenue. The constructive response is early source verification, workable supplier records and clear responsibility for compliance.

Policymakers should ask whether those processes are sufficiently clear and proportionate for forest owners and smaller suppliers to participate. Developers should demonstrate that their sourcing plans meet them. Environmental safeguards and commercial clarity need to work together.

More biofuel does not automatically mean more SAF

Stronger renewable-fuel demand can help the sector while leaving an individual aviation-fuel project facing difficult economics. Where pathways share feedstocks or production assets, relative margins can influence which fuel gets made. That is a commercial risk to test, not evidence that the policy has already failed.

North American sourcing requirements may create opportunities for regional suppliers, including eligible forestry supply chains. They may also narrow purchasing flexibility. The effects will differ between oil-based fuels and routes using woody biomass; treating them as one market obscures the investment choices.

Infrastructure support also needs realistic treatment. FAA’s current FAST programme page lists executed projects but says no additional funding opportunities are planned at present. A developer should not build a financing plan around an assumed next round. FAA programme status.

Make the opportunity deliverable

A constructive policy agenda would align incentive horizons with project development, make eligibility and evidence requirements usable across feedstocks, and assess success through qualifying fuel delivered. Project teams still have to secure customers, manage costs and execute. Policy cannot do that work for them, but it can make the conditions more predictable.

The question is whether America can convert its agricultural, forestry and industrial capabilities into dependable SAF supply. That remains an opportunity worth working for.

The case for action is strong. Getting the policy details right is part of delivering it.

Reporting note: Policy status checked against the linked federal sources as of 17 September 2026. Competitive effects and delivery risks are SAFV1 Editorial’s assessments, not predictions of inevitable outcomes or determinations of any project’s eligibility.