SAF Credits and Incentives Explained

Sustainable Aviation Fuel (SAF) is seen as key to creating a more sustainable aviation industry.  

Unlike cars or trains, aircraft are too heavy for batteries or hydrogen fuel cells, making aviation a notoriously hard-to-abate sector.  

SAF offers a drop-in solution, it can cut lifecycle emissions by up to 80% compared to conventional jet fuel, but it remains significantly more expensive to produce.  

In fact, SAF currently costs 2 to 4 times as much as standard jet fuel, creating a “green premium” that airlines struggle to afford.  

This is where SAF credits and government incentives become crucial, they help bridge the cost gap and accelerate SAF adoption.  

CFP Energy specialises in SAF credits solutions, offering competitive prices at short notice, helping airlines and businesses meet compliance requirements and sustainability goals. 

 Get in touch with our dedicated SAF team for instant support, here. 

Understanding SAF Credits 

SAF credits are tradable certificates that represent the environmental benefits (primarily carbon emission reductions) achieved by producing or using Sustainable Aviation Fuel instead of traditional jet fuel.  

In practice, these credits allow organisations to claim the carbon savings from SAF without physically handling the fuel.  

A “book and claim” system underpins this process. 

 An aviation company or fuel supplier “books” a certain volume of SAF into the fuel network and then “claims” the corresponding emissions reduction as a credit.  

This mechanism decouples the sustainability attribute from the physical fuel, the renewable fuel might be used in one location, while the credit can be sold or transferred to an airline or business elsewhere that wants to offset its aviation emissions. 

To maintain integrity, SAF credits are rigorously certified.  

Credible certification bodies (such as ISCC or RSB) verify the sustainability of the SAF’s feedstock and production pathway, and ensure the credit corresponds to a real, additional emissions reduction.  

This means any SAF credit you purchase has been vetted so that the claimed CO₂ savings are genuine and meet strict criteria.  

Robust certification and tracking (often through secure registries) prevent double-counting and give buyers confidence that the credits truly deliver the environmental benefits advertised.  

In short, SAF credits, when properly certified, let airlines and even non-aviation companies support cleaner flying by funding SAF production, and claim verified carbon reductions toward their sustainability targets. 

The Role of Government Support

SAF credits alone won’t close the price gap. 

Strong government policies are needed to scale up SAF usage. The reason is simple, as noted above, SAF is still far more costly than traditional jet fuel, so policy incentives are needed to make SAF competitive.  

Governments around the world are introducing measures to stimulate SAF production, reduce costs, and create demand, all in pursuit of climate goals.  

In fact, as of 2025, over 80% of global air traffic (measured by passenger distance) is now covered by current or pending SAF policies, reflecting a worldwide push to accelerate the transition to cleaner aviation fuels. 

Mandates (Blending Requirements) 

One common policy tool is blending mandates. 

Governments require fuel suppliers or airlines to include a certain percentage of SAF in the overall jet fuel supply.  

For example, the United Kingdom’s SAF mandate will start at 2% of jet fuel in 2025 and ramp up to 10% by 2030, reaching 22% by 2040. 

The European Union’s ReFuelEU Aviation law similarly sets binding targets. 

2025: 2% 

2030: 6% 

2040: 24% 

2050: 70% 

These mandates guarantee a market for SAF, which gives producers confidence to invest in new plants. They often include enforcement mechanisms, for instance, the UK will impose a buy-out penalty (a fee per litre) on suppliers who miss the SAF targets, ensuring it’s economically preferable to use SAF or purchase SAF credits.  

Such mandates are designed to steadily increase SAF use and drive down costs through economies of scale. 

Financial Incentives (Tax Credits & Subsidies) 

Governments are also using tax credits and direct support to make producing or using SAF more attractive.  

The United States pioneered this approach with a blender’s tax credit and a new production credit under the Inflation Reduction Act.  

Specifically, the U.S. introduced a SAF tax credit of $1.25 per gallon (for fuel with at least 50% lower lifecycle emissions than standard jet fuel) plus an extra $0.50 per gallon for even greater emissions savings.  

This credit was available in 2023–2024 and is now transitioning into a broader Clean Fuel Production Credit known as Section 45Z, which from 2025 offers up to $1.75 per gallon for SAF producers, with the exact value tied to the fuel’s carbon intensity.  

Recent legislation extended the 45Z credit through 2029 to give investors more certainty.  

These incentives aim to bridge the price difference between SAF and conventional fuel.  

For instance, the EU has set aside 20 million carbon allowances worth about €1.5 billion to support SAF. 

In 2024 alone, airlines using SAF received free ETS CO₂ allowances worth roughly €125 million, which covers part of the price gap between SAF and kerosene. Governments are effectively subsidising the “green premium” to make SAF viable until scaling up brings costs down. 

Other support measures include direct grants and funding for SAF facilities.  

The UK’s Advanced Fuels Fund, for example, provides grants to new SAF plants to spur domestic production. Similarly, many countries (and even states/provinces) offer incentives. 

From Illinois’s $1.50/gal credit for airlines using SAF, to proposed SAF producer credits in states like Michigan and Iowa. These financial incentives, alongside mandates, are crucial to stimulate both supply and demand, they encourage refineries to make SAF and airlines to buy it.  

Importantly, policymakers justify these supports as temporary measures to kick-start the SAF market, close the cost gap, and achieve emissions targets that would be unreachable at current SAF prices. 

Why Credits and Incentives Matter 

Credits and incentives for SAF aren’t just bureaucratic tweaks, they are pivotal to the future of sustainable air travel.  

Right now, SAF accounts for a tiny fraction of aviation fuel.  

In 2025, SAF made up only about 0.6% of total jet fuel consumption globally, according to IATA, and even with growth it’s forecast to reach just 0.8% in 2026.  

This underscores a massive challenge. 

Industry and regulators have pledged to reach net-zero aviation by 2050, but without intervention, SAF uptake would remain negligible.  

Credits and incentives are the tools to change that trajectory. They make SAF more competitive with petroleum jet fuel in the near term by either increasing the cost of emitting (carbon pricing, mandates) or reducing the effective cost of SAF (subsidies, tax credits). 

The impact of these tools is already evident.  

By mandating SAF use and backing it with incentives, governments give producers confidence to invest in new production capacity. 

Knowing there will be buyers for their product at a reasonable price. More production means scaling up and technological improvements, which will eventually drive SAF prices down.  

The International Civil Aviation Organization (ICAO) has set a goal of achieving a 5% CO₂ emission reduction from SAF by 2030, which translates to about 14 million tons of SAF needed in 2030.  

Yet as of 2023, global SAF supply was only about 1.3 million tons.

Closing this gap in under a decade is only feasible with strong policy support and market-based incentives attracting huge investments into new SAF refineries.  

Navigating the SAF Landscape 

The SAF policy landscape is complex and evolving rapidly.  

Different jurisdictions have different rules, for example, Europe relies more on blending mandates and trading of compliance credits, while the U.S. focuses on tax credits and state-level clean fuel standards.  

New updates are frequent as one year, a generous credit may be passed, the next year a new government might scale it back or adjust eligibility (as seen with recent tweaks to the U.S. 45Z credit rules).  

For airlines, fuel suppliers, and corporate sustainability managers, keeping on top of these changes is challenging.  

This is where expert guidance is invaluable.  

CFP Energy is an expert in renewable energy compliance, helping organisations navigate the SAF markets and regulations, from understanding how to obtain and use SAF credits for compliance (or voluntary carbon reduction) to structuring deals that maximise available incentives. 

 With so many moving parts including; certification requirements, bookkeeping for credits, fluctuating credit prices and policy revisions, partnering with an expert can ensure you remain compliant and capitalise on every incentive available.  

The team at CFP Energy has experience across the UK, EU, and global SAF schemes, helping clients integrate SAF into their energy transition strategies seamlessly. 

Get SAF Credits here, now.