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IR-2023-240, Dec. 15, 2023
WASHINGTON — The Treasury Division and Inside Income Service at the moment issued Notice 2024-06PDF for the brand new Sustainable Aviation Gasoline (SAF) credit score created by the Inflation Discount Act of 2022.
The SAF credit score applies to a professional gas combination containing sustainable aviation gas for sure gross sales or makes use of in calendar years 2023 and 2024.
The SAF credit score is $1.25 for every gallon of sustainable aviation gas in a professional combination. To qualify for the credit score, the sustainable aviation gas will need to have a minimal discount of fifty% in lifecycle greenhouse fuel emissions. Moreover, there’s a supplemental credit score of 1 cent for every p.c that the discount exceeds 50%, for a most improve of $0.50.
The IRA offers two strategies to find out the lifecycle greenhouse fuel emissions discount share (emissions discount share) that can be utilized to qualify for and calculate the credit score. These are the Carbon Offsetting and Discount Scheme for Worldwide Aviation (CORSIA) methodology and any comparable methodology that meets sure necessities of the Clear Air Act (CAA). Moreover, the IRA requires sure points of every methodology to be licensed by an unrelated social gathering.
At this time’s discover offers further secure harbors utilizing the Environmental Safety Company’s Renewable Gasoline Commonplace (RFS) program and associated steerage. The RFS program makes use of a technique just like CORSIA and meets the necessities of the CAA, and the secure harbors on this discover can be utilized to calculate the emissions discount share and for the corresponding unrelated social gathering certification for the SAF credit score.
Additional, this discover explains that the present Greenhouse gases, Regulated Emissions, and Vitality use in Transportation (GREET) mannequin of the Argonne Nationwide Laboratory and different GREET-based fashions don’t at the moment fulfill the relevant statutory necessities for the SAF credit score.
Lastly, this discover broadcasts that the Division of Vitality is collaborating with different federal companies to develop a modified model of the GREET mannequin that will fulfill the statutory necessities for the SAF credit score. The companies growing this modified GREET mannequin at the moment anticipate its launch in early 2024.
Beforehand, the IRS issued Notice 2023-06PDF, which explains the necessities for the gas to be eligible for the SAF credit score, together with secure harbors for the CORSIA methodology and the corresponding unrelated social gathering certification, and defined which events have to be registered for the completely different actions within the course of.
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