The U.S. Department of the Treasury and Internal Revenue Service (IRS) today released guidance on the Sustainable Aviation Fuel (SAF) Credit established by the Inflation Reduction Act (IRA).

Under the guidance issued today, numerous fuels will qualify for the credit, including valid biomass-based diesel, advanced biofuels, cellulosic biofuel, or cellulosic diesel that have been approved by EPA under the Renewable Fuel Standard (RFS).

Fuels that achieve a 50% or greater reduction in lifecycle greenhouse gas emissions under the most recent Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) standard will continue to qualify under today’s guidance. In addition, EPA, DOT, USDA, and DOE are announcing their commitment to release an updated version of DOE’s GREET model by March 1, 2024. Pending further guidance from the Treasury Department, the updated GREET model will provide another methodology for SAF producers to determine the lifecycle GHG emissions rates of their production for the purposes of qualifying for the SAF Credit for SAF sold or used during calendar years 2023 and 2024.

Reacting to the announcement, Renewable Fuels Association President and CEO Geoff Cooper said, “While there are important carbon modeling updates and details that still need to be worked out, we are cautiously optimistic that today’s guidance could open the door to an enormous opportunity for America’s farmers, ethanol producers and airlines. The Biden administration is recognizing that the best way to meet ambitious SAF targets is to maximize marketplace flexibility, make use of existing low-carbon fuel assets, and stimulate innovation and competition across the entire supply chain.”

Cooper discusses the guidance in this interview:
RFA CEO Geoff Cooper interview (5:53)