Log-in here if you’re already a subscriber
Ever since Congress passed the Inflation Reduction Act last year, ethanol producers and environmentalists have been sparring over what types of sustainable aviation fuels should qualify for its lucrative SAF tax credit. With the release of new guidance from the Treasury Department and Internal Revenue Service on Dec. 15, the Biden Administration has essentially punted, deferring tough decisions around the sustainability of eligible fuels until March 2024.
Related: The politics of ethanol are coming to aviation
The IRA establishes a tax credit of $1.25 per gallon for fuels that reduce life cycle greenhouse gas emissions by 50% compared to conventional jet fuel, with an additional $0.01 per gallon for each additional percentage point of emissions reduction, up to a maximum credit of $1.75. At issue is how those emissions reductions should be calculated — and this is where the administration appears to be walking a tightrope as it heads into an election year.
Subscribe to continue reading...Subscribe to Continue Reading
Our award-winning aerospace reporting combines the highest standards of journalism with the level of technical detail and rigor expected by a sophisticated industry audience.
- Exclusive reporting and analysis on the strategy and technology of flying
- Full access to our archive of industry intelligence
- We respect your time; everything we publish earns your attention
