Treasury, IRS issue guidance for the Sustainable Aviation Fuel Credit

IR-2024-272, Oct. 18, 2024

WASHINGTON - The Treasury Department and Internal Revenue Service today issued Notice 2024-74 PDFfor the Sustainable Aviation Fuel (SAF) credit created by the Inflation Reduction Act.

The SAF credit ranges from $1.25 to $1.75 for each gallon of sustainable aviation fuel in a qualified mixture. To qualify for the credit, the sustainable aviation fuel must have a minimum reduction of 50% in lifecycle greenhouse gas emissions.

The Treasury Department and IRS have issued several notices regarding the SAF credit, including Notice 2024-37, which allows a SAF producer to use the 40BSAF-GREET 2024 model, to calculate the greenhouse gas emissions reduction percentage for purposes of the SAF credits.

The DOE released an updated version of the 40BSAF-GREET 2024 model and accompanying user manual in October 2024 that addresses a calculation issue related to catalyst inputs for the Alcohol to Jet (ATJ) SAF pathways.

Notice 2024-74 provides that a taxpayer who uses a 40BSAF-GREET 2024 safe harbor in Notice 2024-37 to calculate its emissions reduction percentage with respect to claims that relate to the sale or use of a SAF qualified mixture after the effective date, must use the October 2024 version of the 40BSAF-GREET 2024 model.