HR6518-119

What This Bill Does

The SAF Act amends the section 45Z clean fuel production credit for sustainable aviation fuel. It reinstates a special rate calculation for transportation fuel that qualifies as sustainable aviation fuel: for one class of qualified facility, the credit uses 35 cents instead of 20 cents, and for another class, it uses $1.75 instead of $1.00. It defines sustainable aviation fuel as liquid fuel, excluding the kerosene portion, sold for aircraft use, meeting ASTM International Standard D7566 or the Fischer Tropsch provisions of ASTM D1655 Annex A1, and not derived from palm fatty acid distillates or petroleum. It also updates the inflation adjustment rule so the 35 cent and $1.75 SAF amounts are indexed along with other 45Z amounts. Finally, it extends the section 45Z credit termination from fuel sold after December 31, 2029 to fuel sold after December 31, 2033, with the amendments applying to fuel produced after December 31, 2025.

Who Benefits and How

Sustainable aviation fuel producers benefit from higher credit rates and a longer credit window through 2033. Airlines seeking lower-carbon fuel benefit if the higher credit improves supply or lowers net fuel costs. Qualified clean fuel facilities benefit from inflation-indexed SAF amounts. Investors in ASTM-qualified SAF production benefit from greater federal tax-credit certainty. Aviation decarbonization programs benefit from a stronger subsidy for non-petroleum, non-palm fatty acid distillate fuels.

Who Bears the Burden and How

Federal taxpayers bear the cost of larger and longer clean fuel production credits. Treasury and IRS tax administrators must update section 45Z guidance, forms, inflation adjustments, and eligibility rules for the special SAF rates. Producers must document that fuel meets the ASTM D7566 or Fischer Tropsch ASTM D1655 Annex A1 standards and is not derived from excluded feedstocks. Petroleum-derived fuel producers and palm fatty acid distillate fuel suppliers do not receive the special SAF treatment.

Key Provisions

• Restores a special section 45Z rate for sustainable aviation fuel at 35 cents for one qualified facility category.
• Restores a higher $1.75 special rate for another qualified facility category.
• Defines sustainable aviation fuel by aircraft use, ASTM standards, and exclusions for palm fatty acid distillates and petroleum.
• Indexes the 35 cent and $1.75 amounts under the clean fuel production credit inflation adjustment.
• Extends the section 45Z credit termination from fuel sold after 2029 to fuel sold after 2033.
• Applies the amendments to fuel produced after December 31, 2025.