Notice 2024-37: Additional guidance and safe harbors for sustainable aviation fuel credit
SAF credit applies to a qualified fuel mixture containing sustainable aviation fuel for certain sales or uses in calendar years 2023 and 2024
Credit applies to qualified fuel mixture containing sustainable aviation fuel
The IRS today released Notice 2024-37 providing additional guidance and safe harbors for the new sustainable aviation fuel (SAF) credits under sections 40B and 6426(k), created by H.R. 5376 (commonly called the “Inflation Reduction Act of 2022” (IRA)).
The Treasury Department and IRS issued prior guidance regarding SAF credits in Notice 2023-6. Read TaxNewsFlash
Notice 2024-37 provides additional safe harbors for:
- The 40BSAF-GREET 2024 model as a qualifying method to calculate the emissions reduction percentage and for the corresponding unrelated party certification to qualify for SAF credits
- Use of the United States Department of Agriculture (USDA) Climate Smart Agriculture Pilot Program to further reduce the lifecycle greenhouse gas emissions reduction percentage calculated using 40BSAF-GREET 2024 for domestic soybean and domestic corn feedstocks and for certifying the related requirements
Read the related IRS release—IR-2024-127 (April 30, 2024)
Read a related Treasury release
Background
The SAF credit applies to a qualified fuel mixture containing sustainable aviation fuel for certain sales or uses in calendar years 2023 and 2024. The SAF credit is $1.25 for each gallon of sustainable aviation fuel in a qualified mixture. To qualify for the credit, the sustainable aviation fuel must have a minimum reduction of 50% in lifecycle greenhouse gas emissions. Additionally, there is a supplemental credit of one cent for each percent that the reduction exceeds 50%.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.