Sustainable Aviation Fuel (SAF) Tax Credit

Producers of SAF are eligible for a tax credit of $1.25 per gallon. Qualifying SAF must reduce greenhouse gas (GHG) emissions by 50%. SAF that decreases GHG emissions by more than 50% is eligible for an additional $0.01 per gallon for each percent the reduction exceeds 50%, up to $0.50 per gallon. To be eligible, SAF producers must be registered with the Internal Revenue Service (IRS). Additional terms and conditions apply.

For more information, see the IRS guidance for the SAF Tax Credit website and the Guidance on Sustainable Aviation Fuel Credit press release. The guidance provides additional safe harbors using the Environmental Protection Agency’s Renewable Fuel Standard program to calculate the lifecycle greenhouse gas emissions reduction percentage of SAF.

(Reference Public Law 117-169 and 26 U.S. Code 40B)

Jurisdiction: Federal

Type: Incentives

Agency: U.S. Internal Revenue Service

Enacted: Aug 16, 2022

Technologies: Other

See all Federal Laws and Incentives.