US Senate Passes Provision for SAF Tax Credit

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Sustainable aviation fuel (SAF) producers are applauding clean energy incentives in the Inflation Reduction Act (IRA) of 2022 that include a tax credit for SAF. Stakeholders have lobbied for that provision to incentivize production and put SAF on an equal footing with renewable diesel. The credit for the sale of SAF is linked to environmental performance. It starts at $1.25 per gallon for a 50% cut in emissions versus fossil jet and scales up to $1.75 for higher reductions. The bill also includes extensions for a 50¢/gallon credit for alternative fuels, a $1/gallon credit for renewable diesel and biodiesel, and extends through 2024 a $1/gallon income tax credit for second generation biofuel production. The SAF supplies must be produced in the US and used by aircraft refueling in the country.

Biofuels (incl. SAF), Emerging Technologies, Low-Carbon Policy
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