In a state known for taking chances, the Nevada Legislature is reviewing a bill that could lay the groundwork for sustainable aviation. With an economy dependent on air travel and an industry racing to meet decarbonization targets, the state of Nevada and the aviation sector are weighing their odds on this year’s legislative session. 

AB481 makes sustainable aviation fuel (SAF) — an alternative fuel made from sources such as municipal solid waste or plant oils — more affordable for airlines, which signals to producers that there’s a reliable market in Nevada worth investing in. Earmarked for $10 million, the proposed SAF Incentive Program would offer up to $2.50 per gallon in credits to help reduce the gap compared with the price of regular jet fuel, since greener fuel can cost up to six times more than its conventional counterpart.

The bill, which passed the Assembly Committee on Growth and Infrastructure on April 11, would establish a special revenue fund in the state treasury. This means that airlines can claim incentives by submitting requests to the treasurer, who may also accept grants, gifts and donations to bolster the program. 

SAF can reduce emissions from air transportation by as much as 80 percent. It is currently the only viable solution for decarbonizing the sector as it can be integrated into existing airline fleets without the need for costly infrastructure upgrades. Despite this environmental and operational promise, SAF is subject to a classic supply and demand problem, accounting for just .3 percent of total jet fuel worldwide in 2024. Low production yields and high demand lead to high costs per gallon.  

States that already have policies to support in-state SAF production, such as California and Washington, have been encouraged by how the fuel fosters economic growth, development and energy security.

The federal government has supported SAF through the Inflation Reduction Act, Clean Fuel Production Credit and the Department of Energy’s SAF Grand Challenge. Though SAF production has increased, these incentives alone are not enough to help the fuel’s affordability. 

The benefits of SAF are mutual for Nevada and the airline industry, with the state advancing its environmental and transportation goals, and airlines securing a sustainable fuel source that helps them meet mounting industry and regulatory pressure to decarbonize. 

Nevada’s economy is largely sponsored by the tourism industry and relies on domestic and international flights. Harry Reid International Airport and Reno-Tahoe International Airport serve 58.4 and 4.8 million passengers, respectively, with the Las Vegas airport serving all major U.S. airlines and connecting passengers with 160 airports worldwide.  

High passenger traffic comes with an environmental cost. Emissions from transportation are the largest among other sectors in Nevada, with aviation’s emissions growing rapidly. To tackle this, state agencies have developed two complementary strategies for decarbonization: the Transportation Strategy, led by the Department of Transportation, and the Priority Climate Action Plan, created by the Division of Environmental Protection, the Department of Conservation and Natural Resources and the Governor’s Office of Energy. Both strategies specifically note SAF as the ace in the hole. 

In-state SAF production in Nevada is currently dependent on two fuel producers: Edgewood Renewables in Las Vegas and New Rise Renewables near Reno. Both are in early development and production stages. While having two producers is more than what other states may offer, the reason these companies are choosing Nevada may have more to do with our neighboring state.

California has long been a gold standard of sustainability. The incentivization of SAF began in 2019 when production and infrastructure development was integrated into the Low Carbon Fuel Standard, which rewards clean fuel producers. A recent partnership with Airlines for America has encouraged them to aim for 200 million gallons of SAF supplied by 2035. This attracts investment and shows momentum in the SAF sector.  

The sale of SAF in California’s market, supported by cross-state regulatory benefits and proven logistics infrastructure, is a sure bet. As of March 2025, producers earned approximately $60 per metric ton of carbon dioxide reduced, based on market conditions and carbon intensity of the fuel. Meanwhile, Nevada offers no comparable incentives. 

Confirmed in the bill’s testimony by Southwest Airlines’ State and Local Affairs Director Ruben Zaragoza, there is interest in producing SAF in Nevada, but without state-based programs and incentives “these gallons will be diverted to California and other markets.” This strips Nevada of a revenue possibility. 

Nevada has the potential to develop a SAF-friendly environment that can create a sustainable aviation fuel ecosystem, attract industry leaders, boost local economies, create jobs and reduce emissions. Now, that’s a jackpot!

Nevada’s business incentives are already working with existing SAF producers through grants and tax abatement. In 2024, the state approved $11.7 million in tax abatements for Edgewood Renewables as part of these efforts. The Las Vegas Global Economic Alliance backed the project, noting it could create 60 jobs within two years and involve a $100 million capital investment. 

These financial programs alone are not enough to spur an ecosystem of SAF production in Nevada. AB481 proposed a new mechanism that not only incentivizes in-state production but also encourages in-state use. Yet, two critical questions remain: Can Nevada outmatch the incentives offered across the border in California? And does the state have the fiscal capacity to sustain such a program long term?

To meet that bar, Nevada should first leverage its existing assets such as abundant renewable energy, municipal waste streams and its logistics-friendly geography. Second, it must offer enough confidence, infrastructure and support to make investment here worthwhile. This involves broader alignment with state priorities, such as clean energy goals, workforce development and long-term economic resilience.

SAF production isn't just an environmental bet; it’s a commitment to Nevada’s future competitiveness.

Deanna Coleman is on the sustainability team at Allegiant Air, where she focuses on advancing the airline’s environmental goals through SAF procurement and strategic policy engagement. The views expressed are her own and do not reflect those of her employer.

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