Sustainable Aviation Fuel Act

II 117TH CONGRESS 1ST SESSION S. 1608 To support the sustainable aviation fuel market, and for other purposes. IN THE SENATE OF THE UNITED STATES MAY 13, 2021 Mr. WHITEHOUSE (for himself and Mrs. FEINSTEIN) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To support the sustainable aviation fuel market, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Sustainable Aviation 4 Fuel Act’’. 5 SEC. 2. NATIONAL GOAL. 6 It is hereby declared that it is the national goal for 7 the United States to reach— 8 (1) a net 35-percent reduction in greenhouse 9 gas emissions for United States domestic and inter- 10 VerDate Sep 11 2014 19:36 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1608.IS S1608 kjohnson on DSK79L0C42PROD with BILLS 2 •S 1608 IS national aviation flights by 2035, as compared to 1 2005; and 2 (2) net zero greenhouse gas emissions for 3 United States domestic and international aviation 4 flights by 2050. 5 SEC. 3. DEFINITIONS. 6 In this Act: 7 (1) SUSTAINABLE AVIATION FUEL.—The term 8 ‘‘sustainable aviation fuel’’ means liquid fuel con- 9 sisting of synthesized hydrocarbons that— 10 (A) meets the requirements of a Depart- 11 ment of Defense specification for military jet 12 fuel or an American Society of Testing and Ma- 13 terials specification for aviation turbine fuel; 14 (B) is derived from qualified feedstock; 15 and 16 (C) is certified by the Environmental Pro- 17 tection Agency Administrator that such fuel— 18 (i) either— 19 (I) conforms to the standards, 20 recommended practices, requirements 21 and criteria, supporting documents, 22 implementation elements, and any 23 other technical guidance for sustain- 24 able aviation fuels that are adopted by 25 VerDate Sep 11 2014 19:36 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1608.IS S1608 kjohnson on DSK79L0C42PROD with BILLS 3 •S 1608 IS the International Civil Aviation Orga- 1 nization with the agreement of the 2 United States; or 3 (II) meets the definition of ‘‘ad- 4 vanced biofuel’’ under section 5 211(o)(1) of the Clean Air Act (42 6 U.S.C. 7545(o)(1)), as demonstrated 7 by compliance with Environmental 8 Protection Agency implementing regu- 9 lations under subpart M of part 80 of 10 title 40, Code of Federal Regulations; 11 and 12 (ii) achieves at least a 50-percent re- 13 duction in lifecycle greenhouse gas emis- 14 sions compared to conventional jet fuel. 15 (2) QUALIFIED FEEDSTOCK.—The term ‘‘quali- 16 fied feedstock’’ means sources of hydrogen and car- 17 bon not originating from unrefined or refined petro- 18 chemicals. 19 (3) LIFECYCLE GREENHOUSE GAS EMIS- 20 SIONS.—The term ‘‘lifecycle greenhouse gas emis- 21 sions’’ means the combined greenhouse gas emis- 22 sions from feedstock production, collection of feed- 23 stock, transportation of feedstock to fuel production 24 facilities, conversion of feedstock to fuel, transpor- 25 VerDate Sep 11 2014 19:36 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1608.IS S1608 kjohnson on DSK79L0C42PROD with BILLS 4 •S 1608 IS tation and distribution of fuel, and fuel combustion 1 in an aircraft engine, as well as from induced land- 2 use change emissions, as calculated using appro- 3 priate modeling techniques approved by a regulating 4 authority. 5 (4) INDUCED LAND-USE CHANGE EMISSIONS.— 6 The term ‘‘induced land-use change emissions’’ 7 means the greenhouse gas emissions resulting from 8 the conversion of land to the production of feed- 9 stocks and from the conversion of other land due to 10 the displacement of crops or animals for which the 11 original land was previously used, as calculated 12 using appropriate modeling techniques approved by 13 a regulating authority. 14 (5) CONVENTIONAL JET FUEL.—The term 15 ‘‘conventional jet fuel’’ means liquid hydrocarbon 16 fuel used for aviation that is derived or refined from 17 petrochemicals. 18 SEC. 4. GRANT PROGRAM. 19 (a) IN GENERAL.—The Secretary of Transportation, 20 in consultation with the Administrator of the Environ- 21 mental Protection Agency, shall carry out a competitive 22 grant and cost-sharing agreement program for eligible en- 23 tities to carry out projects located in the United States 24 VerDate Sep 11 2014 19:36 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1608.IS S1608 kjohnson on DSK79L0C42PROD with BILLS 5 •S 1608 IS to produce, transport, blend, or store sustainable aviation 1 fuel. 2 (b) SELECTION.—In selecting an eligible entity to re- 3 ceive a grant or cost-share agreement under subsection 4 (a), the Secretary shall consider— 5 (1) the anticipated public benefits of a project 6 proposed by the eligible entity; 7 (2) the potential to increase the domestic pro- 8 duction and deployment of sustainable aviation fuel; 9 (3) the potential greenhouse gas emissions from 10 such project; 11 (4) the potential for creating new jobs in the 12 United States; 13 (5) the potential net greenhouse gas emissions 14 impact of different feedstocks to produce sustainable 15 aviation fuel on a lifecycle basis, which shall include 16 potential direct and indirect greenhouse gas emis- 17 sions (including resulting from changes in land use); 18 and 19 (6) the proposed utilization of non-Federal con- 20 tributions by the eligible entity. 21 (c) AUTHORIZATION OF APPROPRIATIONS.—There is 22 authorized to be appropriated $200,000,000 for each of 23 fiscal years 2022 through 2026 to carry out this section. 24 VerDate Sep 11 2014 19:36 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1608.IS S1608 kjohnson on DSK79L0C42PROD with BILLS 6 •S 1608 IS (d) REPORT.—Not later than October 1, 2027, the 1 Secretary shall submit to the Committee on Commerce, 2 Science, and Transportation and the Committee on Envi- 3 ronment and Public Works of the Senate and the Com- 4 mittee on Transportation and Infrastructure and the 5 Committee on Energy and Commerce of the House of 6 Representatives a report describing the results of the 7 grant program under this section. The report shall include 8 the following: 9 (1) A description of the entities and projects 10 that received grants or other cost-sharing agree- 11 ments under this section. 12 (2) A detailed explanation for why each entity 13 received the type of funding disbursement such enti- 14 ty did. 15 (3) A description of whether the program is 16 leading to an increase in the production and deploy- 17 ment of sustainable aviation fuels and whether that 18 increase is enough to keep the United States on 19 track to achieve the goals described in section 2 of 20 this Act. 21 (4) A description of the economic impacts re- 22 sulting from the funding to and operation of the 23 project. 24 VerDate Sep 11 2014 19:36 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1608.IS S1608 kjohnson on DSK79L0C42PROD with BILLS 7 •S 1608 IS (e) ELIGIBLE ENTITY DEFINED.—In this section, the 1 term ‘‘eligible entity’’ means— 2 (1) a State or local government other than an 3 airport sponsor; 4 (2) an air carrier; 5 (3) an airport sponsor; and 6 (4) a person or entity engaged in the produc- 7 tion, transportation, blending or storage of sustain- 8 able aviation fuel in the United States or feedstocks 9 in the United States that could be used to produce 10 sustainable aviation fuel. 11 SEC. 5. LOW CARBON AVIATION FUEL STANDARD. 12 (a) ESTABLISHMENT OF LOW CARBON AVIATION 13 FUEL STANDARD.—Section 211 of the Clean Air Act (42 14 U.S.C. 7545) is amended by adding at the end the fol- 15 lowing: 16 ‘‘(w) LOW CARBON AVIATION FUEL STANDARD.— 17 ‘‘(1) DEFINITIONS.—In this subsection: 18 ‘‘(A) AVIATION FUEL.—The term ‘aviation 19 fuel’ means fuel that is produced, sold, or dis- 20 pensed in the United States, for civil or military 21 purposes, for turbine-powered aviation. 22 ‘‘(B) CARBON INTENSITY.—The term ‘car- 23 bon intensity’ means the quantity of lifecycle 24 VerDate Sep 11 2014 19:36 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1608.IS S1608 kjohnson on DSK79L0C42PROD with BILLS 8 •S 1608 IS greenhouse gas emissions per unit of fuel en- 1 ergy. 2 ‘‘(C) CREDIT EXCHANGE.—The term ‘cred- 3 it exchange’ means a central marketplace with 4 established rules and regulations where buyers 5 and sellers meet to conduct trades. 6 ‘‘(D) FUEL STANDARD.—The term ‘fuel 7 standard’ means the low carbon fuel standard 8 established under paragraph (2). 9 ‘‘(2) ESTABLISHMENT.—Not later than 1 year 10 after the date of enactment of this subsection, the 11 Administrator shall promulgate regulations to estab- 12 lish a low carbon fuel standard for aviation fuels 13 that requires a reduction in carbon intensity for 14 aviation fuels each calendar year such that by 2050, 15 and thereafter, the average carbon intensity of all 16 aviation fuel used annually in the United States is 17 reduced by at least 50 percent, as compared to the 18 average carbon intensity of all aviation fuel used in 19 the United States in 2005. 20 ‘‘(3) TARGETS.—In promulgating regulations 21 under paragraph (2), the Administrator shall set a 22 target of a reduction of at least 20 percent in the 23 average carbon intensity of all aviation fuel used an- 24 nually in the United States by 2030, and of at least 25 VerDate Sep 11 2014 19:36 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1608.IS S1608 kjohnson on DSK79L0C42PROD with BILLS 9 •S 1608 IS 50 percent by 2050, as compared to the average car- 1 bon intensity of all aviation fuel used in the United 2 States in 2005. 3 ‘‘(4) REQUIREMENTS.—In promulgating regula- 4 tions under paragraph (2), the Administrator 5 shall— 6 ‘‘(A) establish a benchmark for the average 7 carbon intensity of aviation fuels for each cal- 8 endar year, beginning with the first full cal- 9 endar year that begins 2 years after the date of 10 enactment of this subsection, suitable to achiev- 11 ing the targets specified in paragraph (3); 12 ‘‘(B) apply the fuel standard to persons 13 who produce or import aviation fuel; 14 ‘‘(C) establish procedures for calculating 15 the carbon intensity of an aviation fuel, ex- 16 pressed in grams of carbon dioxide equivalent 17 per megajoule, in accordance with— 18 ‘‘(i) the standards, recommended 19 practices, requirements and criteria, sup- 20 porting documents, implementation ele- 21 ments, and any other technical guidance 22 for sustainable aviation fuels that are 23 adopted by the International Civil Aviation 24 VerDate Sep 11 2014 19:36 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1608.IS S1608 kjohnson on DSK79L0C42PROD with BILLS 10 •S 1608 IS Organization with the agreement of the 1 United States; and 2 ‘‘(ii) any other more stringent ac- 3 counting practices determined by the Ad- 4 ministrator to be the best lifecycle green- 5 house gas emission accounting practices, 6 provided that such practices account for 7 the aggregate quantity of greenhouse gas 8 emissions (including direct emissions and 9 significant indirect emissions such as sig- 10 nificant emissions from land use changes), 11 as determined by the Administrator, re- 12 lated to the full fuel lifecycle, including all 13 stages of fuel and feedstock production and 14 distribution, from feedstock generation or 15 extraction through the distribution and de- 16 livery and use of the finished fuel to the 17 ultimate consumer, where the mass values 18 for all greenhouse gases are adjusted to ac- 19 count for their relative global warming po- 20 tential; 21 ‘‘(D) determine how long the calculation of 22 the carbon intensity of an aviation fuel (pursu- 23 ant to the procedures established under sub- 24 VerDate Sep 11 2014 19:36 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1608.IS S1608 kjohnson on DSK79L0C42PROD with BILLS 11 •S 1608 IS paragraph (C)), will remain in effect before 1 needing to be reevaluated; 2 ‘‘(E) allow a person described in subpara- 3 graph (B), who, for a calendar year, produces 4 or imports aviation fuel— 5 ‘‘(i) that has an average carbon inten- 6 sity that is less than the benchmark for av- 7 erage carbon intensity for that calendar 8 year to, except as provided in paragraph 9 (8), generate credits, to be used, or trans- 10 ferred to another person, to demonstrate 11 compliance with this subsection; and 12 ‘‘(ii) that has an average carbon in- 13 tensity that is greater than the benchmark 14 for average carbon intensity for that cal- 15 endar year to purchase credits to be used 16 to demonstrate compliance with this sub- 17 section; 18 ‘‘(F) determine the— 19 ‘‘(i) appropriate amount of credits 20 generated and used to demonstrate compli- 21 ance pursuant to subparagraph (E); and 22 ‘‘(ii) appropriate conditions, if any, 23 on— 24 VerDate Sep 11 2014 19:36 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1608.IS S1608 kjohnson on DSK79L0C42PROD with BILLS 12 •S 1608 IS ‘‘(I) the duration of such credits; 1 and 2 ‘‘(II) the transfer such credits 3 through a credit exchange; and 4 ‘‘(G) consult with all relevant stakeholders, 5 including aviation industry groups, renewable 6 fuel industry groups, researchers at institutions 7 of higher education, labor unions, consumer ad- 8 vocates, and any other stakeholders the Admin- 9 istrator determines to be appropriate. 10 ‘‘(5) CONSULTATION.—In carrying out this sub- 11 section, the Administrator shall consult with the Ad- 12 ministrator of the Federal Aviation Administration, 13 the Secretary of Energy, and the Secretary of Agri- 14 culture. 15 ‘‘(6) COORDINATION WITH STATES.—The Ad- 16 ministrator shall, after notice and opportunity for 17 public hearing, waive application of the fuel stand- 18 ard in any State that has adopted a standard for 19 aviation fuels that the Administrator determines is 20 at least as stringent as the fuel standard. 21 ‘‘(7) REVISION.—If Congress enacts a standard 22 or similar law that the Administrator, in consulta- 23 tion with the Administrator of the Federal Aviation 24 Administration, determines accomplishes the pur- 25 VerDate Sep 11 2014 19:36 Jun 05, 2021 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S1608.IS S1608 kjohnson on DSK79L0C42PROD with BILLS 13 •S 1608 IS poses of the fuel standard for sectors of the economy 1 that include the aviation sector, the Administrator 2 may revoke the fuel standard in favor of the other 3 standard or law. 4 ‘‘(8) RELATIONSHIP TO RENEWABLE FUEL PRO- 5 GRAM.—No credit may be generated under this sub- 6 section with [Text truncated for display. 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