Minnesota SAF tax credit clears key committee

Minnesota State Sen. Ann Rest, a Democrat from New Hope, said her push to make Minnesota a leader in production of sustainable aviation fuel (SAF) cleared a key hurdle Feb. 27 when the Senate Taxes Committee approved a nation-leading tax credit to help expand SAF production opportunities across the state.  

She said both Democrats and Republicans are working in partnership to expand the production of SAF in Minnesota because it opens up new markets for farm products and will create new Minnesota jobs as production facilities come online. 

In November, Moorhead was selected as the future home of a SAF processing facility anticipated to begin production in 2030 and create an estimated 650 jobs.

Moorhead was selected after Senate Democrats passed 2023 legislation to support SAF.  

Sen. Rob Kupec, a Democrat from Moorhead, presented the bill to the tax committee Feb. 27, along with co-author Sen. John Jasinski, a Republican from Faribault, saying it bolsters the credit enacted in 2023.

“An expanding SAF industry is a real opportunity for our state because it will open up new markets for Minnesota farm products, and will create new jobs,” Rest said. “I am very pleased that DFLers (Democrats) and Republicans worked in partnership to move a nation-leading tax credit through my committee and will continue to do so as it works its way through the Legislature. This improvement to the credit that we passed in 2023 will keep our state leading the way in production of SAF.”

Kupec added, “Sustainable aviation fuel has the potential to rapidly decarbonize the aviation industry, provide additional revenue streams for a wide array of farmers, communities and industries, and create good-paying jobs throughout Minnesota. But this only happens if we take steps to bring production to scale. This is more than just a win-win for our state, it’s a win-win-win-win. We can support our farmers, reduce our carbon emissions and grow our economy, and this bill will help us do so.”

Jasinski said, “This is an economic jet engine for the state of Minnesota. The potential benefits for Minnesota are massive—new facilities, thousands of jobs and incredible new opportunities for farmers to sell their crops and repurpose waste materials. We aren’t trying to just meet the demand for SAF in Minnesota—we are aiming to meet the global demand. We have the opportunity to keep Minnesota at the forefront of innovation and make sure our economy takes off right alongside it.” 

Rest said Minnesota is well-positioned to be a leader in the SAF industry because it is home to many of the feedstocks used to develop the fuel such as corn, soybeans, cover crops, solid waste, forestry waste and clean hydrogen, and the state serves as a hub for Delta Airlines, which support advancements in SAF.

The University of Minnesota is also researching ways to develop winter cover crops that could be used in SAF production in the future.

Use of SAF substantially reduces greenhouse gases and carbon compared to petroleum jet fuel.

The tax credit, created by the legislature in 2023, is meant to give Minnesota a competitive edge to capture a growing technology to help the airline industry reduce its carbon footprint across the globe.