IR-2024-127, April 30, 2024

WASHINGTON — The Department of Treasury and the Internal Revenue Service today issued Notice 2024-37PDF for the new Sustainable Aviation Fuel (SAF) Credit created by the Inflation Reduction Act of 2022 (IRA).

The Treasury Department and the IRS developed this guidance in consultation with the Environmental Protection Agency, the Department of Energy, the Department of Agriculture (USDA) and the Federal Aviation Administration of the Department of Transportation.

The SAF credit applies to a qualified fuel mixture containing sustainable aviation fuel for certain sales or uses after Dec. 31, 2022, and before Jan. 1, 2025.

The SAF credit is $1.25 for each gallon of sustainable aviation fuel in a qualified mixture. To qualify for the credit, the sustainable aviation fuel must have a minimum reduction of 50% in lifecycle greenhouse gas emissions. Additionally, there is a supplemental credit of one cent for each percent that the reduction exceeds 50%, for a maximum increase of $0.50.

Today's notice provides additional safe harbors using the 40BSAF-GREET 2024 model. DOE worked with the Treasury Department and other federal agencies to develop the 40BSAF-GREET 2024 model, including specifications for and limitations on taxpayer inputs and background inputs to the model.

The safe harbors in this notice can be used to calculate the emissions reduction percentage and for the corresponding unrelated party certification for the SAF credit.

Further, this notice provides a safe harbor for use of the USDA Climate Smart Agriculture Pilot Program to further reduce the emissions reduction percentage calculated using the 40BSAF-GREET 2024 model for domestic soybean and domestic corn feedstocks and for certifying the related requirements.