The US Department of the Treasury and Internal Revenue Service (IRS) have released guidance on the eligibility for the Sustainable Aviation Fuel (SAF) Credit, which was introduced by the Inflation Reduction Act (IRA).

The credit provides a tax credit of USD 1.25–1.75 per gallon for SAF that achieves a lifecycle greenhouse gas (GHG) emissions reduction of at least 50% compared to petroleum-based jet fuel. SAF that decreases by 50% is eligible for the USD 1.25 credit per gallon, while SAF that decreases by more than 50% is eligible for an additional USD 0.01 per gallon for each percentage point the reduction exceeds 50%. This goes up to USD 0.50 per gallon.

Furthermore, the SAF Interagency Working Group (IWG) has unveiled the 40B SAF-GREET 2024 model on a pilot basis. This provides a methodology for SAF producers to determine the lifecycle GHG emissions rates for the SAF Credit.

As per the guidance, the corn ethanol-to-jet fuel will be eligible for the credit if a bundle of Climate Smart Agriculture (CSA) practices (no-till, cover crop, and enhanced efficiency fertilizer) is used. A similar GHG reduction credit will be provided for soybean-to-jet if the soybean feedstock is produced using a bundle of CSA practices (no-till and cover crop). This pilot program is specific to the 40B credit, which is in effect for 2023 and 2024.