Renewable Fuels Association Happy with Tax Credit Model for SAF

The US Treasury Department has made the announcement that they will use a modified version of the Greenhouse Gases Regulated Emissions and Energy Use in Transportation model when it comes to allocating tax credits for sustainable aviation fuels under the Inflation Reduction Act in an effort to reduce greenhouse gas emissions. Renewable Fuels Association President and CEO, Geof Cooper says that they are pleased with the announcement as they have been pushing the department to use the GREET model.

“The tax credit is available to producers of sustainable aviation fuel that can demonstrate that the fuel they're producing reduces greenhouse gas emissions by 50% or more compared to petroleum-based jet fuel. So in order to make that demonstration, there has to be a carbon intensity analysis, there has to be a lifecycle analysis that's done to see what the CI value the carbon intensity value of that SAF is. And so we've been waiting for many months now for details on what methodology the Treasury Department is going to require for conducting that lifecycle analysis. We have been advocating that the Treasury should use the Department of Energy's GREET model.

Cooper adds that tax credits will be retroactive for staff that was produced during the 2023 calendar year.

“If it meets the 50% reduction and now we have the models or will soon have the models available to make that demonstration.”