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California Governor Gavin Newsom's proposed 2026-27 state budget includes a tax credit to encourage the production of sustainable aviation fuel (SAF) by offsetting diesel excise tax liabilities. This initiative aims to promote in-state SAF production, reduce reliance on conventional jet fuel, and support the state's climate and air-quality goals by fostering investment in clean transportation technologies. The proposal is part of a broader strategy to enhance sustainable industries, pending legislative approval.