Purpose

• Update Minnesota law to redefine what counts as sustainable aviation fuel (SAF) and set criteria for eligibility. The bill aims to ensure SAF used or sold in the state meets strict environmental standards, based on life cycle greenhouse gas (GHG) emissions reductions, and to clarify who can qualify for related tax or program benefits by defining a “qualifying taxpayer.”

Key definitions and scope

• SAF defined as a liquid fuel derived from:
  • Biomass (as defined in the statute),
  • Gaseous carbon oxides produced from biomass or from direct air capture, or
  • Green electrolytic hydrogen.
• SAF must not be derived from palm fatty acid distillates.
• SAF must achieve at least a 50% life cycle GHG emissions reduction compared with petroleum-based aviation gasoline, aviation turbine fuel, or jet fuel.
• How the 50% reduction is measured:
  • Using the most recent version of the Argonne National Laboratory GREET model, accounting for emissions throughout the fuel production process, or
  • Using the International Civil Aviation Organization (ICAO) life cycle methodology (with the United States’ agreement), showing at least a 50% reduction of core life cycle emissions and positive induced land use change values.
• Other defined terms:
  • Aircraft, aviation gasoline, and jet fuel have meanings from other Minnesota statutes.
  • The Commissioner refers to the Commissioner of Agriculture.
  • A “qualifying taxpayer” is a taxpayer (as defined in state tax law) engaged in producing SAF or blending SAF with aviation gasoline or jet fuel.

Main provisions

• Amends Minnesota Statutes to include the new SAF definitions and criteria in section 41A.30 subdivision 1.
• Establishes the feedstock sources for SAF (biomass, gaseous carbon oxides from biomass or direct air capture, green electrolytic hydrogen) and the prohibition on using palm fatty acid distillates.
• Sets the 50% life cycle GHG reduction threshold, with two approved methods to demonstrate compliance:
  • GREET model-based life cycle analysis, or
  • ICAO methodology with US agreement, including core emissions and land use change considerations.
• Specifies who is a “qualifying taxpayer” (producers of SAF or those blending SAF with aviation fuels).

Significant changes to existing law

• Creates a formal, testable standard for what qualifies as SAF in Minnesota (50% GHG reduction threshold).
• Ties SAF eligibility to specific production pathways and feedstocks (including biomass, direct air capture-derived carbon oxides, and green hydrogen) and excludes palm fatty acid distillates.
• Incorporates two recognized, industry-standard methods for determining GHG reductions (GREET model and ICAO methodology with US agreement).
• Introduces a defined category (qualifying taxpayer) for entities involved in SAF production or blending, aligning with related tax or program provisions.

Implementation considerations

• Affects producers and blender entities by providing a clear standard for SAF eligibility in Minnesota.
• Requires adherence to either GREET-based or ICAO-based life cycle analyses to prove environmental benefits.
• Likely increases reporting and verification obligations for SAF supply chains to demonstrate the 50% GHG reduction threshold.

Notable conditions

• SAF must be a liquid fuel and must meet the specified feedstock and emissions criteria.
• The analysis methods rely on widely used, interstate/international standards (GREET model and ICAO methodology) with the U.S. agreement condition for ICAO.

Relevant Terms - sustainable aviation fuel (SAF) - greenhouse gas (GHG) emissions reduction - life cycle assessment / life cycle analysis - GREET model (Greenhouse Gases, Regulated Emissions, and Energy Use in Technologies) - ICAO (International Civil Aviation Organization) methodology - palm fatty acid distillates - biomass - gaseous carbon oxides - direct air capture - green electrolytic hydrogen - petroleum-based aviation gasoline - aviation turbine fuel - jet fuel - qualifying taxpayer - Commissioner of Agriculture - aircraft - aviation gasoline