President Joe Biden delivers remarks on lowering energy costs and Bipartisan Infrastructure Law investments in rural communities, Tuesday, April 12, 2022, at Poet Bioprocessing-Menlo in Menlo, Iowa. (Official White House Photo by Adam Schultz)

Biden Administration walks SAF tightrope heading into 2024

Long-awaited guidance on the U.S. sustainable aviation fuel tax credit pushes the thorniest questions on eligibility into next year.

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Release Date
December 15, 2023
Biden Administration walks SAF tightrope heading into 2024
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.

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