Developed by: Inflation Reduction Act
Federal Agency: Department of the Treasury
Production Tax Credit
Description: Provides a tax credit for domestic production of clean transportation fuels, including sustainable aviation fuels.
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.
Timing: Fuel produced after 12/31/24 and used or sold before 12/31/27.
Amount:
- 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.
More information: Request for Comments
