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26 U.S. Code § 45Z

IRA Statuatory Location:

13704

Tax Code Location:

26 U.S. Code § 45Z

New or Modified Provision:

New

Eligible Recipients:

Registered producers in the United States. Fuels with less than 50 kilograms of carbon dioxide equivalent per million British thermal units (CO2e per mmBTU) qualify as clean fuels eligible for credits.

Tribal Eligibility:

Yes

Funded by:

U.S. Department of Treasury

Description

Provides a tax credit for domestic production of cleantransportation fuels, including sustainable aviation fuels.
Direct Pay Eligibility:
Credit is 5 times the base amount ($1/gallon for non-aviation fuel, $1.75 gallon for aviation fuel, multiplied by the emissions factor) for facilities meeting prevailing wage and registered apprenticeship requirements. Inflation adjusted after 2024. Initial guidance on the labor provisions is available here. (https://www.federalregister.gov/documents/2022/11/30/2022-26108/prevailing-wage-and-apprenticeship-initial-guidance-under-section-45b6bii-and-other-substantially)
Transferability:
Stackability:
Energy Community Bonus:
No

Relevant Announcements

Related Resources

Additional information is available on the Resources page.

Key Details

Period of Availability
Fuel produced after 12/31/24 and used or sold before 12/31/27.
Tax Mechanism:
Production tax credit
Base Credit Amount:
The base amount is $0.20/gallon for non-aviation fuel and $0.35/gallon for aviation fuel, multiplied by the carbon dioxide “emissions factor” of the fuel. Inflation adjusted after 2024.
Bonus Credit Amount:
Credit is 5 times the base amount ($1/gallon for non-aviation fuel, $1.75 gallon for aviation fuel, multiplied by the emissions factor) for facilities meeting prevailing wage and registered apprenticeship requirements. Inflation adjusted after 2024. Initial guidance on the labor provisions is available here. (https://www.federalregister.gov/documents/2022/11/30/2022-26108/prevailing-wage-and-apprenticeship-initial-guidance-under-section-45b6bii-and-other-substantially)
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