The Treasury Department on Friday released long-awaited guidance on a new tax credit for sustainable aviation fuel that will allow agricultural commodities to qualify as SAF feedstocks under an updated version of the Energy Department’s relatively ag-friendly model for calculating the carbon intensity of biofuels, administration officials say. The tax credit, which took effect this year and runs through 2024, starts at $1.25 per gallon and can be worth as much as $1.75 per gallon, based on the carbon intensity of the fuel, what it’s made from and how it’s processed.
The tax break was included in the Inflation Reduction Act to serve as a bridge to a broader clean fuels production credit that takes effect in 2025 under the law.
The updates to DOE’s GREET model for assessing the greenhouse gas emissions of biofuels will include the latest information on farming practices and will be completed by March 1, said Agriculture Secretary Tom Vilsack. Read more