Aviation Emissions Reduction Opportunity Act or the AERO Act
This bill requires the Department of Transportation to award competitive grants for projects in the United States that support the production and deployment of sustainable aviation fuel or the development of low-emission aviation technologies. Eligible grantees include, among others, state or local governments, air carriers, and research institutions.
To establish an alternative fuel and low-emission aviation technology 
                    program, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Aviation Emissions Reduction 
Opportunity Act'' or the ``AERO Act''.

SEC. 2. ALTERNATIVE FUEL AND LOW-EMISSION AVIATION TECHNOLOGY PROGRAM.

    (a) Establishment.--The Secretary shall establish a competitive 
grant program to provide grants to eligible entities to carry out 
projects located in the United States that produce, transport, blend, 
or store sustainable aviation fuel, or develop, demonstrate, or apply 
low-emission aviation technologies.
    (b) Considerations.--In carrying out subsection (a), the Secretary 
shall consider, with respect to a proposed project--
            (1) the capacity for the eligible entity to increase the 
        domestic production and deployment of sustainable aviation fuel 
        or the use of low-emission aviation technologies among the 
        United States commercial aviation and aerospace industry;
            (2) the projected greenhouse gas emissions from such 
        project, including emissions resulting from the development of 
        the project, and the potential the project has to reduce or 
        displace, on a lifecycle basis, United States greenhouse gas 
        emissions associated with air travel;
            (3) the capacity to create new jobs and develop supply 
        chain partnerships in the United States;
            (4) for projects related to the production of sustainable 
        aviation fuel, the projected lifecycle greenhouse gas emissions 
        benefits from the proposed project, which shall include 
        feedstock and fuel production and potential direct and indirect 
        greenhouse gas emissions (including resulting from changes in 
        land use); and
            (5) the benefits of ensuring a diversity of feedstocks for 
        sustainable aviation fuel, including the use of waste carbon 
        oxides and direct air capture.
    (c) Cost Share.--The Federal share of the cost of a project carried 
out using grant funds under subsection (a) shall be a maximum of 90 
percent of the proposed total cost of the project, and the Secretary 
shall consider the extent to which a proposed project meets the 
considerations described in subsection (b) in determining the Federal 
share under this subsection.
    (d) Fuel Emissions Reduction Test.--For purposes of clause (ii) of 
subsection (f)(7)(E), the Secretary shall, not later than 2 years after 
the date of enactment of this section, adopt at least 1 methodology for 
testing lifecycle greenhouse gas emissions that meets the requirements 
of such clause.
    (e) Funding.--
            (1) Authorization of appropriations.--Out of any money in 
        the Treasury not otherwise appropriated, there are authorized 
        to be appropriated for each of fiscal years 2022 through 2026, 
        $200,000,000 to carry out the purposes of this Act, to remain 
        available until expended.
            (2) Funding distribution.--Subject to paragraph (3), of any 
        amount made available under paragraph (1)--
                    (A) 30 percent of such amount shall be awarded for 
                projects that develop, demonstrate, or apply low-
                emission aviation technologies; and
                    (B) 70 percent of such amount shall be awarded for 
                projects that produce, transport, blend, or store 
                sustainable aviation fuel.
            (3) Administration.--The Secretary may reserve not more 
        than 2 percent of the amount appropriated under paragraph (1) 
        for expenses related to administering this section.
    (f) Definitions.--In this section:
            (1) Eligible entity.--The term ``eligible entity'' means--
                    (A) a State or local government, including the 
                District of Columbia, other than an airport sponsor;
                    (B) an air carrier;
                    (C) an airport sponsor;
                    (D) an accredited institution of higher education;
                    (E) a research institution;
                    (F) a person or entity engaged in the production, 
                transportation, blending, or storage of sustainable 
                aviation fuel in the United States or feedstocks in the 
                United States that could be used to produce sustainable 
                aviation fuel;
                    (G) a person or entity engaged in the development, 
                demonstration, or application of low-emission aviation 
                technologies; or
                    (H) nonprofit entities or nonprofit consortia with 
                experience in sustainable aviation fuels, low-emission 
                aviation technologies, or other clean transportation 
                research programs.
            (2) Feedstock.--The term ``feedstock'' means sources of 
        hydrogen and carbon not originating from unrefined or refined 
        petrochemicals.
            (3) Induced land-use change values.--The term ``induced 
        land-use change values'' means the greenhouse gas emissions 
        resulting from the conversion of land to the production of 
        feedstocks and from the conversion of other land due to the 
        displacement of crops or animals for which the original land 
        was previously used.
            (4) Lifecycle greenhouse gas emissions.--The term 
        ``lifecycle greenhouse gas emissions'' means the combined 
        greenhouse gas emissions from feedstock production, collection 
        of feedstock, transportation of feedstock to fuel production 
        facilities, conversion of feedstock to fuel, transportation and 
        distribution of fuel, and fuel combustion in an aircraft 
        engine, as well as from induced land-use change values.
            (5) Low-emission aviation technologies.--The term ``low-
        emission aviation technologies'' means technologies, produced 
        in the United States, that significantly--
                    (A) improve aircraft fuel efficiency;
                    (B) increase utilization of sustainable aviation 
                fuel; or
                    (C) reduce greenhouse gas emissions produced during 
                operation of civil aircraft.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Transportation.
            (7) Sustainable aviation fuel.--The term ``sustainable 
        aviation fuel'' means liquid fuel, produced in the United 
        States, that--
                    (A) consists of synthesized hydrocarbons;
                    (B) meets the requirements of--
                            (i) ASTM International Standard D7566; or
                            (ii) the co-processing provisions of ASTM 
                        International Standard D1655, Annex A1 (or such 
                        successor standard);
                    (C) is derived from biomass (in a similar manner as 
                such term is defined in section 45K(c)(3) of the 
                Internal Revenue Code of 1986), waste streams, 
                renewable energy sources, or gaseous carbon oxides;
                    (D) is not derived from palm fatty acid 
                distillates; and
                    (E) achieves at least a 50-percent lifecycle 
                greenhouse gas emissions reduction in comparison with 
                petroleum-based jet fuel, as determined by a test that 
                shows--
                            (i) the fuel production pathway achieves at 
                        least a 50-percent reduction of the aggregate 
                        attributional core lifecycle emissions and the 
                        induced land use change values under a 
                        lifecycle methodology for sustainable aviation 
                        fuels similar to that adopted by the 
                        International Civil Aviation Organization with 
                        the agreement of the United States; or
                            (ii) the fuel production pathway achieves 
                        at least a 50-percent reduction of the 
                        aggregate attributional core lifecycle 
                        greenhouse gas emissions values and the induced 
                        land-use change values under another 
                        methodology that the Secretary determines is--
                                    (I) reflective of the latest 
                                scientific understanding of lifecycle 
                                greenhouse gas emissions; and
                                    (II) as stringent as the 
                                requirement under clause (i).
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Aviation Emissions Reduction Opportunity Act
A bill to establish an alternative fuel and low-emission aviation technology program, and for other purposes.
AERO Act
Aviation Emissions Reduction Opportunity Act
Sen. Warnock, Raphael G.