After 10 p.m. Friday night the House dropped their 645 page infrastructure reconciliation package. I haven’t read the whole thing yet, just the 41 page summary. U.S. airlines last week increased their commitment to use biofuels. It’s no wonder why:
Sec. 136203. Sustainable aviation fuel credit.
Beginning in 2023, this provision provides a refundable blenders tax credit for each gallon of sustainable aviation fuel sold as part of a qualified fuel mixture. The value of the credit is determined on a sliding scale, equal to $1.25 plus an additional $.01 for each percentage point by which the lifecycle emissions reduction of such fuel exceeds 50%. Taxpayers may elect to claim this credit as an excise tax credit against section 4041 excise tax liability.
To claim the credit taxpayers must certify to the Secretary that such fuel reduces emissions reduction by at least 50%, determined by a methodology conforming with all the requirements of the most recent Carbon Offsetting and Reduction Scheme for International Aviation adopted by the International Civil Aviation Organization with the support of the United States. Within two years of date of enactment of this provision, the Secretary of the Treasury, in consultation with the Secretary of Energy and the EPA Administrator, shall establish procedures by which taxpayers may obtain a certification from the Secretary consistent with such requirements. This provision terminates the $1.00 section 40A tax credit for aviation fuel produced from biodiesel beginning after December 31, 2022.
This provision shall apply for fuel sold or used after December 31, 2022. The credits allowed under this provision expire after December 31, 2031.
The federal government will be subsidizing aviation biofuel mixtures at at least $1.25 per gallon, and going up from their depending on the emission reductions those fuel achieve. And here you thought you were done paying the airlines after $79 billion in direct pandemic aid.