The Minnesota Soybean Growers Association (MSGA) appreciates Gov. Tim Walz for including improvements to the Sustainable Aviation Fuel (SAF) Tax Credit program in his 2026 Supplemental Budget Recommendations.  

The governor’s proposal clarifies eligible SAF feedstocks, including soybeans, and creates a supplemental tax credit for ultra-low carbon SAF and adds environmental safeguards. The recommendation would expand the existing income tax credit to support SAF production in Minnesota. A supplemental tax credit rate would be available for SAF that achieves a lifecycle greenhouse gas reduction rate of greater than 50 percent. The maximum credit allocation is increased by $5.3 million in fiscal years 2027 and 2028, and by $2.1 million in FY 2029. This credit helps accelerate and scale SAF production in the state to produce cleaner aviation fuels developed with agricultural products, including soybeans.  

“Gov. Walz and his administration recognize that Minnesota has been a renewable fuels leader for a quarter century, and we can continue to lead on this issue by promoting SAF production here at home,” MSGA President Darin Johnson said. “Through the governor’s proposal, we can build new markets and crop opportunities for our farmers, helping to boost rural economic development throughout Greater Minnesota, where we’re growing these feedstocks.”  

A proposal before the Minnesota Legislature during the 2026 legislative session would maintain Minnesota’s competitiveness, create certainty and reward producers for making the lowest-carbon SAF. Additional funding for the MN SAF Tax Credit would extend the credit from 2030-2035, maintaining Minnesota’s status as a national leader in growing the SAF market and provide certainty that SAF producers need to make multi-million dollar capital investments. The legislation would also encourage ultra low-carbon SAF by increasing the tax credit by two cents per gallon for each additional percentage carbon intensity reduction beyond 50%, up to 50 cents per gallon.  

In addition, the proposal, which is supported by MSGA, contains policy language creating environmental guardrails that were negotiated among a broad coalition of stakeholders. The guardrails define eligibility for the incentive:  

• Only domestic U.S. feedstocks, including soybeans, corn, etc., will be used for eligible fuel.  

• Agricultural feedstocks must be grown on land cultivated before the Renewable Fuel Standard was enacted in 2007 to qualify.  

• SAF produced with carbon capture and sequestration only qualifies for the credit if the carbon is permanently stored underground, rather than used for oil recovery.  

• Explicitly clarifies that SAF made with green hydrogen is eligible for Minnesota tax incentives. 

SAF is a safe and certified alternative jet fuel that can cut carbon emissions of jet fuel by more than 80%, compared to conventional jet fuel. Currently, SAF must be blended with conventional jet fuel, with blending limits ranging from 5% to 50% to meet ASTM standards. 

In September 2024, Delta Airlines and the Minnesota SAF Hub announced the first blending facility in Minnesota in collaboration with Delta and Flint Hills Resources. The facility will blend up to 30 million gallons of SAF at its Pine Blend Refinery in Minnesota and is being constructed, with operations expected to begin in 2026.  

MSGA recently discussed SAF market opportunities during its Hill Visits in St. Paul in March 2026. Johnson said he’s optimistic that SAF production incentives will continue to see bipartisan support in the Minnesota Legislature.  

“There is a lot of opportunity as we look forward in the SAF market, and we need to make sure soybeans are a part of it,” Johnson said. “We just need to keep our head up high and keep working hard to support biofuels.”