Clean fuel production credit

This is a more broadly available tax credit available to any transportation fuel that achieves approximately a 50% carbon intensity reduction from a petroleum baseline. For non-aviation fuel, the credit amount is available on an ascending scale from nothing to USD 1 per gallon (USD 0.26/liter) based on the degree of emissions reduction achieved by the fuel.

The Inflation Reduction Act (IRA) also creates a technology-neutral clean fuel production tax credit under Section 45Z. This credit applies to transportation fuel produced and sold by the taxpayer from December 31, 2024, through to December 31, 2027, which also meets a particular emissions reduction factor. The Act provides a base credit of USD 0.20 per gallon (USD 0.05/liter) or USD 1.00 per gallon (USD 0.26