New federal guidance from the Internal Revenue Service sets the Sustainable Aviation Fuel Credit at $1.25 to $1.75 for each gallon of sustainable aviation fuel in a qualified mixture.
To qualify for the credit, which was created by the Inflation Reduction Act, the fuel must have a minimum reduction of 50% in life cycle greenhouse gas emissions.
This is the latest in several notices regarding the SAF credit, including Notice 2024-37, which allows a SAF producer to use the 40BSAF-GREET 2024 model to calculate the greenhouse gas emissions reduction percentage for SAF credits.
An updated version of the 40BSAF-GREET 2024 model and user manual recently addressed calculations related to catalyst inputs for the Alcohol-to-Jet SAF pathways. Under the new guidance, a taxpayer who uses a 40BSAF-GREET 2024 safe harbor to calculate its emissions reduction percentage must use the October 2024 version of the 40BSAF-GREET 2024 model.