SSB 5932
In CommitteeSenate
Alternative jet fuel
Providing certainty for the development of low-to-zero carbon alternative jet fuel production in Washington state.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill creates tax incentives and a reduced tax rate to encourage the development and use of low-carbon alternative jet fuel (also called sustainable aviation fuel) in Washington. It sets specific carbon intensity rules for electricity used in production, ties the start of tax benefits to verified production capacity or a fixed date, and limits the incentives to nine years.
- Requires the Department of Ecology to allow specific carbon intensity pathways for alternative jet fuel and to use the carbon intensity of electricity from utility contracts (e.g., power purchase agreements) in production calculations.
- Establishes a tax credit of $1 per gallon (up to $2) for producers and users of alternative jet fuel with at least 50% lower carbon intensity than conventional jet fuel, increasing for greater reductions.
- Creates a reduced tax rate of 0.275% for manufacturing and selling alternative jet fuel, effective no earlier than July 1, 2031 (or earlier if 20 million gallons of annual production capacity is verified).
- Sets a nine-year expiration for both the tax credit and tax rate, beginning after the credit/tax takes effect.
- Requires verification by the Department of Ecology that production facilities are not located on historic burial grounds before credits can be claimed.
- Mandates annual performance reports for businesses claiming credits or paying the reduced tax rate.
Who is affected
- Alternative jet fuel producers — Businesses that produce alternative jet fuel in Washington may qualify for tax credits and a reduced manufacturing/sales tax rate, but only after state verification of sufficient production capacity and meeting carbon intensity requirements.
- Alternative jet fuel users (e.g., airlines, airports) — Airlines, airports, and other businesses that purchase and use alternative jet fuel for flights departing from Washington may claim tax credits, provided the fuel meets carbon intensity standards and production capacity thresholds are met.
- Rural counties — Counties with populations under 650,000 may benefit from additional tax credit eligibility for in-county fuel producers, encouraging economic development in smaller communities.
- State agencies (Ecology and Revenue) — The Washington Department of Ecology must verify production capacity thresholds and certify carbon intensity levels for alternative jet fuel, while the Department of Revenue administers tax credits and reporting.
Pro/Con Analysis
Potential Benefits (5)
The $1–$2 per gallon tax credit for alternative jet fuel use by businesses (e.g., airlines, airports) that serve Washington flights creates a direct financial incentive to reduce aviation emissions — a major source of state GHG emissions. This helps decarbonize a hard-to-electrify sector and may lower emissions from air travel departing from WA airports, benefiting public health and climate goals.
Business & EmploymentPeopleRef: Sec. 4(1)(b)(ii); Sec. 5(1)(b); Sec. 6(1)(b)The bill ties tax incentives to a verified 20-million-gallon annual production threshold, creating a clear, predictable timeline for industry investment. This certainty lowers capital risk for early-stage producers (including rural biorefineries and pilot plants), potentially catalyzing new jobs and manufacturing in underserved areas — especially if local producers in counties under 650,000 population qualify for priority credits.
Business & EmploymentPeopleRef: Sec. 2(3); Sec. 3(5)(a)(i); Sec. 4(1)(f)(i); Sec. 5(1)(e)(i); Sec. 6(1)(e)(i)By allowing producers to attribute the carbon intensity of their specific electricity contracts (e.g., PPAs with clean energy providers), the bill ensures that clean electricity used in fuel production is fully counted — not diluted by grid averages. This strengthens the climate benefit of each gallon and encourages new renewable energy development, especially in regions with high clean energy potential like Eastern WA.
EnvironmentPeopleRef: Sec. 2(4)(a)(i)-(iii); Sec. 3(1)-(2); Sec. 4(1)(b)-(c); Sec. 5(1)(b)-(c); Sec. 6(1)(b)-(c)The requirement that producers verify with Ecology that facilities are not located on historic burial grounds — and the 60-day deemed-verification rule — adds a layer of cultural resource protection before tax incentives are granted. While not perfect, this helps prevent development on sacred sites and aligns with state laws protecting burial grounds under chapters 27.44 and 68.60 RCW.
Public SafetyLean peopleRef: Sec. 4(1)(h); Sec. 5(1)(h); Sec. 6(1)(h)The automatic effective date of July 1, 2031 — even if production thresholds aren’t met — provides a backstop to ensure Washington’s climate policies remain on track. This prevents indefinite delay of incentives and gives airlines and fuel suppliers certainty to plan for decarbonization, supporting long-term supply chain investments in clean aviation fuel.
Business & EmploymentPeopleRef: Sec. 3(5)(a)(ii); Sec. 4(1)(f)(ii); Sec. 5(1)(e)(ii); Sec. 6(1)(e)(ii); Sec. 4(9)(a)(ii); Sec. 5(9)(a)(ii); Sec. 6(9)(a)(ii)
Potential Concerns (5)
The bill creates a $1–$2 per gallon tax credit for alternative jet fuel production and use, and a reduced 0.275% manufacturing/sales tax rate — but only after 20 million gallons of verified production capacity is achieved or July 2031, whichever comes first. While this creates a financial incentive for early adopters, the delayed effective date and high production threshold mean most revenue loss occurs after 2031, when the state’s clean fuels program and other climate policies are already in full effect, reducing the incremental climate benefit and increasing the net fiscal cost to the state.
FinancialRef: Sec. 2(4)(a)(iii); Sec. 3(1)-(2); Sec. 4(1)(b)-(c); Sec. 5(1)(b)-(c); Sec. 6(1)(b)-(c)The tax credits disproportionately benefit large producers and blenders located in counties with populations under 650,000 — but the $1–$2/gallon credit scales only with carbon intensity reduction, not with job creation or local hiring. In practice, this means large biofuel corporations with existing facilities in rural counties (e.g., Puget Sound Energy’s Port of Pasco project) capture most of the benefit, while small-scale or new entrant producers face high compliance and verification barriers.
Business & EmploymentIndustryRef: Sec. 4(1)(b)(i); Sec. 4(8)(c); Sec. 5(1)(b); Sec. 6(1)(b)The bill requires Department of Ecology verification that fuel production facilities are not located on historic burial grounds before credits can be claimed — a meaningful protection for Indigenous cultural sites. However, the 60-day deemed-verification window and lack of tribal consultation requirements may allow projects to proceed before full cultural resource review, especially where tribes lack state-recognized standing to intervene.
Public SafetyIndustryRef: Sec. 4(1)(f), (h); Sec. 5(1)(e); Sec. 6(1)(e)By allowing producers to use the carbon intensity of their specific power purchase agreements (PPAs) rather than the utility’s average fuel mix, the bill incentivizes clean electricity procurement — but only for facilities that can afford long-term PPAs, which are typically signed by large, well-capitalized firms. This may increase clean energy demand but could also reduce pressure on utilities to decarbonize their broader grid supply.
EnvironmentLean industryRef: Sec. 2(4)(a)(i)-(iii); Sec. 3(1)-(2); Sec. 4(1)(b)-(c); Sec. 5(1)(b)-(c); Sec. 6(1)(b)-(c)The bill mandates that contract pricing for alternative jet fuel sales must reflect the per-gallon credit — effectively requiring producers to pass savings to buyers. In practice, this benefits large airlines and airport operators (e.g., Seattle-Tacoma International Airport) that can absorb and monetize the credit, while small regional carriers or fuel distributors may lack bargaining power to negotiate the full benefit.
Business & EmploymentIndustryRef: Sec. 4(1)(g); Sec. 5(1)(g); Sec. 6(1)(g)
Who Is Most Affected
Large biofuel producers (e.g., LanzaTech, World Energy) and energy companies with existing infrastructure in Eastern WA stand to gain the most from the $1–$2/gallon credit and reduced tax rate. Their ability to meet the 20M-gallon threshold and secure clean power PPAs gives them priority access to benefits.
Airlines and airports (e.g., Alaska Airlines, Sea-Tac) benefit from credits for purchasing low-carbon fuel — reducing their compliance costs under the state’s Clean Fuels Program and helping meet corporate sustainability goals. However, they may pass savings to consumers rather than investing in local jobs.
Rural counties with populations under 650,000 (e.g., Franklin, Yakima) may see new investment if local producers qualify for enhanced credits. However, without strong local hiring or procurement mandates, economic benefits may accrue to out-of-state investors rather than residents.
The Department of Ecology and Department of Revenue face new administrative burdens: verifying production capacity, certifying carbon intensity, and managing credit claims. While this expands their climate role, it may strain existing staffing and resources without dedicated funding.
Small-scale or new entrant producers (e.g., community biorefineries, tribal energy initiatives) face high barriers: the 20M-gallon threshold, complex verification, and competition from larger firms. Without set-asides or technical assistance, they are unlikely to benefit meaningfully.