America has long been heralded as a global aviation leader. But a holdover Biden-era fuel policy could set back our airline industry.
For several years, and at times under political pressure, leading airlines have committed to implementing sustainable aviation fuel (SAF) as a significant portion of its fuel inputs.
SAF is a drop-in fuel that gets added to conventional jet fuel, not a standalone source, typically made from biomass, fats, or grease. Typically, SAF has a limited amount of cycloalkanes and arenes, two chemical compounds needed to power airplanes, and usually must be mixed with conventional jet fuel to work.
Airlines are starting to realize SAF’s downsides, even in moderate quantities—and particularly during a global fuel shortage. This expensive fuel costs between two and five times as much as conventional jet fuel.
At least one airline is now recognizing that it had been moving too fast and too furious towards implementing SAF as a fuel source, particularly at a time of soaring fuel costs. In April, Delta Airlines very reasonably walked back its SAF pledge. Yet, other airlines are still on autopilot not backing away from their SAF commitments.
While airlines using modest amounts of SAF to fuel planes is not necessarily illogical, being held to unrealistic commitments made under political pressure is. That is what happened when, under overt pressure from the Biden administration, American Airlines, Delta, Southwest, and United each pledged in 2022 to increase SAF use to 10% of their jet fuel composition by 2030.
What may have seemed like organic decision making was in fact the product of a deal, struck in 2021 between the airlines and the Biden administration, reached against the backdrop of the implicit threat of government penalties, including legal action against airlines’ routine acquisitions and mergers.
These commitments, if they were ever prudent, are certainly not now. Fuel costs are on the rise, and even conventional jet fuel prices are going up considerably, now projected to rise by almost 40%, according to the Department of Energy.
The Biden administration didn’t just leverage sticks to incentivize SAF use: it offered carrots, too. In particular, it offered subsidies and tax credits for airlines that pledged to undertake a greater shift to SAF, increasing airlines’ short-term interest in adopting ambitious SAF pledges.
This led to Biden administration policies like the 45Z tax credit in the 2022 Inflation Reduction Act (IRA). Under the 45Z code, SAF was subsidized at $1.75 per gallon, a steep cost. In 2025, as part of the One Big Beautiful Bill Act, Congress cut the subsidy to $1.00 per SAF gallon–still a high cost.
With soaring overall fuel costs facing the industry, it is imperative for airlines to set fuel margins as tight as possible, or risk bankruptcy. Take the abrupt closure of budget carrier Spirit Airlines on May 2nd, 2026. A number of factors contributed to Spirit’s demise, but the company’s chief executive officer (CEO) didn’t mince words about what ultimately felled the airline. Dave Davis said, “a sudden and sustained rise in fuel prices” caused not just by the Iran war—impeded global gas and oil trade.
There are other warning signs in the industry. Scott Kirby, United Airlines CEO, said fares are expected to start rising by a startling 15 to 20% this year. At the same time, two other top airlines, Frontier and JetBlue, are at risk of severe financial woes, aviation experts argue.
Airlines can temporarily pocket subsidies from 45Z, but the long-term cost of their unrealistic commitments may soon become clear. These companies should refrain from politically motivated policies and foolish gimmicks, and focus on their competitiveness instead.