Updates Needed Before 45Z Clean Fuel Production Tax Credit is Released

Clean Fuels Alliance America says the U.S. Treasury’s new modeling does provide a path for agricultural feedstocks to receive sustainable aviation fuel (SAF) blender tax credits, but it’s not perfect.

Kurt Kovarik, vice president of federal affairs, tells Brownfield the credit expires at the end of 2024.

“While it was nice to get this guidance for SAF, it gives us a bit of a window into the modeling and the process that they use to arrive at their conclusions, we’re going to analyze it to understand where they got it wrong,” he says.

He says the organization will be identifying what additional climate-smart practices and information the interagency working group needs to consider before it releases the 45Z Clean Fuel Production Credit.

“We have producers who are entering the feedstock contracts and off-take agreements for fuel for 2025 in the near term and they need to know what the credit value is going to be for the fuel based on what feedstock and process they use,” he says.

Kovarik says canola is not eligible for the credit with the current model and there is more work to be done to make sure farmers and the industry are recognized for their emission reduction efforts.

Click here for the interview.

Originally shared by Brownfield News, May 2, 2024. Title updated for purpose, May 11, 2024.

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