New sustainable aviation fuel credit

The definition of sustainable aviation fuel (SAF) in the Inflation Reduction Act (IRA) is as follows: liquid fuel, the portion of which is not kerosene, which is sold for use in an aircraft, and which meets the requirements of ASTM International Standard D7566, or the Fischer Tropsch provisions of ASTM International Standard D1655, Annex A1, and is not derived from palm fatty acid distillates or petroleum.

The IRA provides for an excise tax credit for SAF under the newly added Internal Revenue Code (IRC) section 6426(k), starting in 2023.

In September 2021, the Biden administration announced an interim target for increasing SAF production in the U.S. to at least 3 billion gallons (11.34 billion liters) per year by 2030.

Two provisions included in the IRA a