Minnesota's SAF tax credit: The environmental guardrails
These guardrails, which are additions to an already existing tax credit, strongly encourage the use of winter camelina (seen in the photo above) — a crop that is in the ground from fall through spring, helping to protect water from agriculture pollution. (Photo by Dodd Demas)
The 2026 legislative session was key for a river-friendly sustainable aviation fuel industry in Minnesota. A wide array of partners worked together to advocate for a new set of environmental guardrails to be added to the state’s already existing SAF tax credit. (Read more about FMR's role in the effort.) The bill passed with bipartisan support, and sets up Minnesota to produce the most sustainable SAF in the country.
Below, you can read about the five guardrails and how they changed the tax credit for the better.
The tax credit scales with carbon emission reductions
How this helps the river: Encourages use of the most sustainable fuel sources
With the original tax credit, any fuel that reduced emissions by at least 50% received an equal tax credit. Now, it’s a sliding scale: The lower-carbon the fuel, the larger the tax credit. This encourages companies to use fuel made from more sustainable sources — like winter-hardy camelina being developed by Forever Green — and provides incentives for on-farm conservation practices.
Only crops grown on existing farmland are eligible
How this helps the river: Protects natural habitat from being converted into agriculture
Airlines need a lot of fuel. We were concerned people might raze forests or till up prairie to create more space to grow SAF crops, then take advantage of the tax credit. Now, only crops grown on farmland that has existed for many years (prior to Dec. 19, 2007) can qualify. This also adds incentive to use winter camelina, which can grow on the same acres as existing summer crops.
Enhanced oil recovery is prohibited for SAF tax credit eligibility
How this helps the river: Blocks a practice that intensifies climate change impacts
Enhanced oil recovery is a process that captures carbon produced by a facility before it enters the air, and uses that carbon to push more crude oil out of the ground. Our work on SAF is about improving climate conditions for the river. Now no one can claim the tax credit if carbon captured during the SAF production process is then used for enhanced oil recovery. That way, we’re ensuring state dollars meant to incentivize clean energy aren’t funding the regional fossil fuel projects that increase climate change.
How FMR helped establish MN's first environmental guardrails on SAF
Thanks to FMR’s efforts and unlikely alliances, guardrails for this growing industry will help protect the river. Here's how these safeguards came together.
Green hydrogen now qualifies
How this helps the river: Opens the door for future fuel sources that prove sustainable
Winter-hardy oilseeds being developed by the U of M’s Forever Green Initiative will be the most sustainable way to make SAF for a while. In the future, technologies such as green hydrogen could also offer a truly sustainable source of fuel. These technologies, when available, will now qualify for the tax credit.
Foreign feedstocks are not eligible
How this helps the river: Incentivizes on-farm sustainability practices in the river basin
SAF is happening on a global scale. We don’t want companies razing natural lands like the Amazon Rainforest to grow crops that qualify for Minnesota’s tax credit. By restricting the tax credit to crops grown in the U.S., we’re both helping to prevent deforestation elsewhere and encouraging farms here to use river-friendly farming practices that adhere to the tax credit.
Making SAF as sustainable as possible
We know the most impactful way we can reduce agricultural pollution to the Mississippi River is by creating many acres of continuous living cover crops. Sustainable aviation fuel can be a driving force to make that happen — if done responsibly. These environmental guardrails are a step toward that future.
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