US Readies Long-Awaited Guidance on Sustainable Jet Fuel Tax Policy

With the US Treasury Department’s impending release of guidance on producing lower-emitting jet fuel from US corn and other crops, Bracewell’s Tim Urban talked with Bloomberg about the potential tax credit implications tied to the production of sustainable aviation fuel (SAF).

“There is definitely anxiety out there caused by this uncertainty about the implementation of the law,” said Urban. “In many cases, taxpayers have gone ahead with plans for clean energy facilities based on their reading of the statute, and now they are wondering whether the administration’s upcoming regulations will impose unanticipated rules that negatively impact their business plans.”

At issue is debate over how to calculate greenhouse-gas emissions from SAF, which can be made from a wide array of ingredients, including ethanol. US makers of the corn-based biofuel are counting on SAF to significantly boost their product, which is now blended with gasoline for motor fuel and faces lower demand as electric vehicles gain market share. They have been concerned the tax credit guidance dealing with emissions could leave some ethanol firms ineligible for the government subsidies.