"U.S. Treasury and Biden Administration Drive Innovation and Cut Emissions in Aviation Sector with Tax Credits"

The U.S. Department of the Treasury and IRS have released guidance on the Sustainable Aviation Fuel (SAF) Credit, aimed at reducing emissions from the aviation sector and promoting innovation. The credit incentivizes the production of SAF that achieves a minimum 50% reduction in lifecycle greenhouse gas emissions compared to petroleum-based jet fuel. Producers of SAF are eligible for a tax credit ranging from $1.25 to $1.75 per gallon. The guidance clarifies eligibility criteria and includes various fuels that qualify for the credit. Additionally, the EPA, DOT, USDA, and DOE have committed to releasing an updated version of the GREET model by March 2024, providing another methodology for SAF producers to determine lifecycle emissions rates and qualify for the credit.