Treasury Department Releases Guidance for SAF Credit

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

The guidance released today will “catalyze innovation in the aviation industry and incentivize the production of cleaner and more sustainable aviation fuels,” said U.S. Treasury Secretary Janet Yellen during a House Ways and Means Committee hearing.

US Treasury Secretary Janet Yellen 1:04

Tuesday’s announcement includes the new 40B SAF-GREET 2024 model that provides another methodology for SAF producers to determine the lifecycle GHG emissions rates of their production for the purposes of the SAF Credit. The modified GREET version incorporates new data, including updated modeling of key feedstocks and processes used in aviation fuel and indirect emissions, as well as integrates key greenhouse gas emission reduction strategies such as carbon capture and storage, renewable natural gas, and renewable electricity.

Importantly, the notice also incorporates a USDA pilot program to encourage the use of certain Climate Smart Agriculture (CSA) practices for SAF feedstocks to lower overall GHG emissions and increase adoption of farming practices associated with environmental benefits such as improved water quality and soil health.

USDA Secretary Tom Vilsack spent much of his time meeting with farm broadcasters on Tuesday explaining the guidance to them.

USDA Sec. Vilsack to NAFB members 16:03