IRS Issues SAF Blender's Tax Credit Guidance | Aviation International News

Sustainability and Environment

IRS Issues SAF Blender's Tax Credit Guidance

Following the establishment of a sustainable aviation fuel blender's tax credit under the Inflation Reduction Act of 2022, the IRS has issued guidance.

World Energy Sustainable Fuel Plant in Paramount, California — The IRS' newly-issued guidance on the sustainable aviation fuel blender's tax credit will be of particular interest to producers such as World Energy which operates a facility in Paramount, California. (Photo: Curt Epstein/AIN)

By Curt Epstein • Business Aviation Services Editor

December 26, 2022

The Treasury Department and Internal Revenue Service have issued guidance regarding the sustainable aviation fuel (SAF) blender’s tax credit, which was established under the Inflation Reduction Act of 2022.

Notice 2023-06 explains the requirements for the fuel to be eligible for the blender's credit of $1.25 for each gallon of SAF in a qualified mix. To qualify for the credit, the SAF must have a minimum reduction of 50 percent in lifecycle greenhouse gas emissions. Additionally, for each percent of reduction that passes 50 percent, there will be a supplemental credit of one cent. It will apply to a qualified fuel mixture containing SAF for certain sales or uses in calendar years 2023 and 2024.

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