Overview
Section 45Z provides a production tax credit for clean transportation fuels, including sustainable aviation fuel (SAF) and other clean fuels. The credit amount is based on the lifecycle greenhouse gas emissions of the fuel produced, with higher credits for fuels with lower emissions. This technology-neutral approach encourages innovation across various clean fuel pathways.
Credit Structure
Base credit per gallon
Base rate scaled by emissions factor (non-aviation fuels)
With Prevailing Wage & Apprenticeship
Enhanced credit per gallon
With prevailing wage requirements (non-aviation fuels)
Bonus Multipliers
Sustainable Aviation Fuel
+Higher RatesSAF receives a minimum $1.25/gallon base credit, up to $1.75/gallon with wage requirements.
Emissions Factor Scaling
+VariableCredit amount scales based on lifecycle GHG emissions relative to petroleum baseline.
Eligibility & Requirements
- 1Fuel must be produced in the United States
- 2Must be used for transportation purposes
- 3Lifecycle GHG emissions must be at least 25% lower than petroleum baseline
- 4Production must occur after December 31, 2024
- 5Must be registered with IRS and meet all reporting requirements
Direct Pay Election
Tax-exempt entities may elect direct payment for Section 45Z credits on qualified clean fuel production.
Learn More About Direct Pay