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- Tax Credit
IRA Statuatory Location:
13704
Tax Code Location:
26 U.S. Code § 45Z
New or Modified Provision:
New
Eligible Recipients:
Clean fuel producers
Tribal Eligibility:
Yes
Bureau/Office
Funded by:
U.S. Department of Treasury
Description
Provides a tax credit for domestic production of cleantransportation fuels, including sustainable aviation fuels. Registered producers in the United States. Fuels with less than 50kilograms of carbon dioxide equivalent per million British thermal units (CO2e per mmBTU)qualify as clean fuels eligible for credits.
Direct Pay Eligibility:
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/gallonfor aviation fuel, multiplied by the carbon dioxide emissions factor of the fuel (defined as the quotient of 50 kg CO2e/MMBtu minus the emission rate factor of the fuel divided by 50 kg CO2e/MMBtu). Inflation adjusted after 2024.
Bonus Credit Amount:
Credit is 5 times the base amount ($1/gallon for non-aviation fuel, $1.75gallon for aviation fuel, multiplied by the emissions factor) for facilities meeting prevailing wageand registered apprenticeship requirements. Inflation adjusted after 2024. Initial guidance on thelabor 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)