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Bill

HB 1694

RELATING TO SUSTAINABLE AVIATION FUEL TAX CREDIT.

2026 Regular Session

Hawaii establishes a tax credit for sustainable aviation fuel producers to incentivize local SAF development and reduce aviation emissions.

The committee on TRN recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 8 Ayes: Representative(s) Kila, Miyake, Cochran, Evslin, Grandinetti, Kitagawa, La Chica; Ayes with reservations: Representative(s) Muraoka; Noes: none; and 1 Excused: Representative(s) Pierick.
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Bill Summary · HB 1694

Legislative bill overview

HB 1694 establishes a tax credit for producers and blenders of sustainable aviation fuel (SAF) in Hawaii. The credit is designed to incentivize the development of a local SAF industry by reducing the tax burden on entities that manufacture or process SAF that meets federal sustainability standards.

Why this is important

Aviation fuel represents a significant portion of Hawaii's energy consumption and carbon emissions, given the state's reliance on air travel for commerce and tourism. By creating financial incentives for SAF production, the bill aims to reduce aviation's environmental footprint while potentially developing new clean energy jobs and reducing the state's dependence on imported petroleum products.

Potential points of contention

  • Fiscal cost: The bill creates a tax credit that reduces state revenue; fiscal impact depends on credit structure, duration, and take-up rates, which could strain the state budget if widely utilized
  • Market viability concerns: SAF production currently costs significantly more than conventional jet fuel; critics may question whether a state tax credit is the most efficient way to support an emerging industry versus federal support
  • Beneficiary concentration: Tax credits typically benefit larger producers with existing infrastructure; smaller operators or startups may struggle to access the incentive, potentially limiting economic diversification benefits
  • Specificity gaps: The bill's effectiveness depends on detailed implementation terms (credit percentage, eligibility criteria, sunset provisions) which would appear in regulations

Compiled from official sources — confirm details with the bill’s official record.

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