Revised GREET to Allow SAF Credits for Ethanol in 2023 and 2024
IRS issued Notice 2024-6 last week indicating that guidance will come soon in 2024 to allow ethanol to qualify for SAF credits.
Sustainable Aviation Fuel (SAF) credits allow the jet fuel producer a credit from the IRS to help offset the extra cost of producing this fuel. This credit for 2023 and 2024 is a base of $1.25 per gallon plus up to an extra 50 cents per gallon credit for a total of $1.75 per gallon. Remember that a bushel of corn can produce close to 3 gallons, therefore, the equivalent credit per bushel is at least $5 in some situations and a minimum of $3.75 (approximately).
This extra credit is based upon the reduction in “carbon” that the producer can achieve. We are not experts on methods used to calculate this credit. Instead, we are reproducing the terminology from the notice regarding using ANL-GREET that should allow corn ethanol to qualify for this SAF credit.
Here is the terminology: