The IRS has released additional guidance and safe harbors (Notice 2024-37) for taxpayers calculating and documenting lifecycle greenhouse gas emissions when seeking to claim the new Sustainable Aviation Fuel credit under Section 40B.
The new notice builds on previous guidance in Notice 2024-6 and Notice 2023-6. The Sustainable Aviation Fuel credit under Section 40B was created by the Inflation Reduction Act and provides a refundable $1.25 per gallon credit for blending sustainable aviation fuel that meets specific lifecycle greenhouse gas emissions standards.
The new guidance provides:
- A safe harbor for calculating the lifecycle greenhouse gas emissions under a modified version of the Argonne National Laboratory’s Greenhouse gases, Regulated Emissions and Energy use in Technologies (R&D GREET) model
- A safe harbor for certifying the related requirements under by using the California Air Resources Board’s (CARB) Low Carbon Fuel Standard program (LCFS) accredited verifiers (CARB LCFS verifiers)
- A safe harbor for an additional reduction in calculating the lifecycle greenhouse gas emissions using the 40BSAF-GREET 2024 model in conjunction with the USDA Climate Smart Agriculture Pilot Program (USDA CSA Pilot Program)
- A safe harbor for certifying the related requirements for purposes of the USDA CSA Pilot Program by using an unrelated party certifier that meets the USDA CSA Pilot Program requirements
- Information about registration
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