IRS, Treasury issue guidance on SAF tax credit, requests LCA model feedback

Source: By OPIS • Posted: Thursday, December 22, 2022

The U.S. Internal Revenue Service and the Treasury Department have issued guidance on the minimum $1.25/gal tax credit for sustainable aviation fuel (SAF) that was included in the Inflation Reduction Act and has invited stakeholder feedback on which lifecycle assessment (LCA) model the credit scheme should rely on to measure greenhouse gas emission reductions.

The IRS also said it expects to issue further guidance on the tax credit and has invited stakeholder feedback on several topics, including the possibility of using the Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) lifecycle emissions assessment model developed by the Department of Energy’s Argonne National Laboratory. Leading up to the passage of the IRA, several biofuels producers and industry groups urged Congress to use the GREET model for the SAF credit, claiming that ICAO’s model relies on obsolete data that is seven to 15 years old and would disqualify a sizable amount of potential American-made SAF.