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Is Illinois State SAF tax credit of $1.50 per gallon the new Splash & Dash?

Illinois has passed a bill that would provide a State tax credit of $1.50 per Gallon of SAF blended with limitations of 10 mil gal of Soybean oil feedstock per SAF user/blender. This new State Tax credit will add to the existing $1.25 per Gallon Federal SAF blend tax credit as long as it meets 50% Green House Gas savings Vs a fossil jet fuel comparator.

To understand the magnitude of the combined Federal and State subsidy it is useful to convert to Metric Tons using the density of SAF... this equates to $1053/MT in addition to RINs which is $977 for a total of $2029 per Metric Ton. As a comparison Mineral Jet fuel values in Northwest Europe (there are no biojet subsidies in Europe) are $1200/MT when SAF is priced at ~$3300 per Metric Ton.

The limitation on Soybean oil used as feedstock by the Illinois law, I suppose, is to limit the demand on soybean oil that was not limited in the Federal tax credit since the credit was below the ask of the Renewable Diesel industry. In fact the Federal Tax credit is designed to incentivize use of alternative feedstocks. Nevertheless, the magnitude of the Illinois credit when added to the Federal Tax credit will definitely incentivize more SAF blending as it moves the economics needle for renewable diesel plants to produce more SAF for blending now in Illinois. The law does not seem to limit the number of blenders and therefore the likelihood of causing a rush for SAF splash and dash in Illinois can only be limited by the Illinois budget!

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