Clean Fuel Production Credit

Beginning January 1, 2025, the Treasury Department will offer tax credits for the production and sale of low emission transportation fuels, including sustainable aviation fuel (SAF). The tax credit amount is $0.20 per gallon for non-aviation fuel and $0.35 per gallon for SAF. For facilities that satisfy the prevailing wage and apprenticeship requirements, the credit amount is $1.00 per gallon for non-aviation fuel and $1.75 per gallon for SAF. For any taxable year, the Clean Fuel Production Credit is equal to the applicable credit amount per gallon multiplied by the fuel’s carbon dioxide emissions factor. Emissions factors will be published annually by the Secretary of the Treasury. Beginning January 1, 2025, tax credits will be adjusted for inflation. The Internal Revenue Service (IRS) released guidance on registration requirements to claim the credit in May 2024 and frequently asked questions about applying for registration in July 2024. Further guidance is forthcoming. For more information, including guidance updates, see the IRS Credits and Deductions under the Inflation Reduction Act website.

(Reference Public Law 117-169 and 26 U.S. Code 45Z)