New rules for Sustainable Aviation Fuel Credit

Workers prepare a Bombardier Global 6000 aircraft ahead of the Jet Expo 2012 exhibition at Vnukovo airport in Moscow.
Andrey Rudakov/Bloomberg

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. 

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