Sec. 13203. Sustainable aviation fuel credit
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Subpart D of part IV of subchapter A of chapter 1 is amended by inserting after section 40A the following new section: For purposes of section 38, the sustainable aviation fuel credit determined under this section for the taxable year is, with respect to any sale or use of a qualified mixture which occurs during such taxable year, an amount equal to the product of— the number of gallons of sustainable aviation fuel in such mixture, multiplied by the sum of— $1.25, plus the applicable supplementary amount with respect to such sustainable aviation fuel.
For purposes of this section, the term applicable supplementary amount means, with respect to any sustainable aviation fuel, an amount equal to $0.01 for each percentage point by which the lifecycle greenhouse gas emissions reduction percentage with respect to such fuel exceeds 50 percent. In no event shall the applicable supplementary amount determined under this subsection exceed $0.50. For purposes of this section, the term qualified mixture means a mixture of sustainable aviation fuel and kerosene if— such mixture is produced by the taxpayer in the United States, such mixture is used by the taxpayer (or sold by the taxpayer for use) in an aircraft, such sale or use is in the ordinary course of a trade or business of the taxpayer, and the transfer of such mixture to the fuel tank of such aircraft occurs in the United States.
For purposes of this section, the term sustainable aviation fuel means liquid fuel, the portion of which is not kerosene, which— meets the requirements of— ASTM International Standard D7566, or the Fischer Tropsch provisions of ASTM International Standard D1655, Annex A1, is not derived from coprocessing an applicable material (or materials derived from an applicable material) with a feedstock which is not biomass, is not derived from palm fatty acid distillates or petroleum, and has been certified in accordance with subsection
(e)as having a lifecycle greenhouse gas emissions reduction percentage of at least 50 percent. In this subsection— The term applicable material means— monoglycerides, diglycerides, and triglycerides, free fatty acids, and fatty acid esters. The term biomass has the same meaning given such term in section 45K(c)(3). For purposes of this section, the term lifecycle greenhouse gas emissions reduction percentage means, with respect to any sustainable aviation fuel, the percentage reduction in lifecycle greenhouse gas emissions achieved by such fuel as compared with petroleum-based jet fuel, as defined in accordance with— the most recent Carbon Offsetting and Reduction Scheme for International Aviation which has been adopted by the International Civil Aviation Organization with the agreement of the United States, or any similar methodology which satisfies the criteria under section 211(o)(1)(H) of the Clean Air Act ( 42 U.S.C. 7545(o)(1)(H) ), as in effect on the date of enactment of this section. No credit shall be allowed under this section with respect to any sustainable aviation fuel unless the producer or importer of such fuel— is registered with the Secretary under section 4101, and provides— certification (in such form and manner as the Secretary shall prescribe) from an unrelated party demonstrating compliance with— any general requirements, supply chain traceability requirements, and information transmission requirements established under the Carbon Offsetting and Reduction Scheme for International Aviation described in paragraph
(1)of subsection (e), or in the case of any methodology established under paragraph
(2)of such subsection, requirements similar to the requirements described in clause (i), and such other information with respect to such fuel as the Secretary may require for purposes of carrying out this section. The amount of the credit determined under this section with respect to any sustainable aviation fuel shall, under rules prescribed by the Secretary, be properly reduced to take into account any benefit provided with respect to such sustainable aviation fuel solely by reason of the application of section 6426 or 6427(e). This section shall not apply to any sale or use after December 31, 2024. . Section 38(b), as amended by the preceding provisions of this Act, is amended by striking plus at the end of paragraph (33), by striking the period at the end of paragraph
(34)and inserting , plus , and by inserting after paragraph
(34)the following new paragraph: the sustainable aviation fuel credit determined under section 40B. . Section 40A(d)(1) is amended by inserting or 40B after determined under section 40 . Section 40A(f) is amended by striking paragraph (4). Section 6426 is amended by adding at the end the following new subsection: For purposes of this section, the sustainable aviation fuel credit for the taxable year is, with respect to any sale or use of a qualified mixture, an amount equal to the product of— the number of gallons of sustainable aviation fuel in such mixture, multiplied by the sum of— $1.25, plus the applicable supplementary amount with respect to such sustainable aviation fuel. Any term used in this subsection which is also used in section 40B shall have the meaning given such term by section 40B. For purposes of this subsection, rules similar to the rules of section 40B(f) shall apply. . Section 6426 is amended— in subsection (a)(1), by striking and
(e)and inserting (e), and
(k), and in subsection (h), by striking under section 40 or 40A and inserting under section 40, 40A, or 40B . Section 6427(e) is amended— in the heading, by striking and inserting, or alternative fuel , alternative fuel, or sustainable aviation fuel in paragraph (1), by inserting or the sustainable aviation fuel mixture credit after alternative fuel mixture credit , and in paragraph (6)— in subparagraph (C), by striking and at the end, in subparagraph (D), by striking the period at the end and inserting , and , and by adding at the end the following new subparagraph: any qualified mixture of sustainable aviation fuel (as defined in section 6426(k)(3)) sold or used after December 31, 2024. . Section 4101(a)(1) is amended by inserting every person producing or importing sustainable aviation fuel (as defined in section 40B), before and every person producing second generation biofuel . The table of sections for subpart D of subchapter A of chapter 1 is amended by inserting after the item relating to section 40A the following new item: Sec. 40B. Sustainable aviation fuel credit. . Section 87 is amended by striking and in paragraph (1), by striking the period at the end of paragraph
(2)and inserting , and , and by adding at the end the following new paragraph: the sustainable aviation fuel credit determined with respect to the taxpayer for the taxable year under section 40B(a). . The amendments made by this section shall apply to fuel sold or used after December 31, 2022.
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Sec. 13203
Sustainable aviation fuel credit
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