The bill restores a previously available ‘‘special rate’’ calculation for sustainable aviation fuel under section 45Z of the Internal Revenue Code, re-establishing SAF-specific treatment separate from other transportation fuels. It also narrows the statutory definition of eligible SAF by tying qualification to ASTM specifications and by excluding certain feedstocks, and it lengthens the statutory life of the credit beyond its current sunset.
That combination raises the per-unit tax incentive for SAF relative to other fuels and prolongs the policy horizon for project economics. The practical result: the bill aims to make SAF projects more bankable and to steer producers away from disfavored feedstocks, with implications for refiners, airlines, fuel blenders, and Treasury revenue forecasting.
At a Glance
What It Does
Reinstates a special-rate calculation that applies only to sustainable aviation fuel under the clean fuel production credit, amends the statutory definition of SAF to reference ASTM standards and exclude certain feedstocks, and extends the credit’s availability period. It also makes a conforming cross-reference change in section 45Z.
Who It Affects
Producers and qualifying facilities that make or blend aviation fuels, downstream buyers (airlines and fuel suppliers), tax and project finance teams that structure renewable-fuel deals, and federal budget analysts who track tax expenditures.
Why It Matters
By restoring SAF-specific tax treatment and extending the credit window, the bill materially alters returns for SAF projects compared with other renewable fuels. It also uses technical fuel standards and feedstock exclusions to steer production choices — not just overall supply.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
The bill operates inside the clean fuel production credit statute (section 45Z) and does three operational things. First, it revives a distinct calculation that treats sustainable aviation fuel differently from other transportation fuels; that calculation is layered on top of the existing credit framework and applies only when the fuel meets the statutory definition of SAF.
Second, the bill supplies that SAF definition by pointing to existing fuel-quality standards published by ASTM and by excluding specific feedstocks from eligibility. Third, the legislation extends the period during which the credit can be claimed and adjusts cross-references inside section 45Z so the new SAF-specific amounts are recognized throughout the provision.
Mechanically, the reinstated ‘‘special rate’’ is not an entirely new credit; the bill tells the Code to apply alternate per-unit amounts when SAF is produced at the facilities described in the statute’s existing facility categories. That distinction matters because the statutory scheme differentiates between facility types for rate-setting and compliance.
The bill also inserts a fuel-focused eligibility test rather than creating a separate certification regime: it ties qualification to ASTM specifications already used in aviation fuel markets and disqualifies fuels derived from listed feedstocks.From an implementation standpoint, tax advisors and project sponsors will need to pay attention to origination and production dates, facility qualification under the existing paragraph structure of section 45Z, and documentation that demonstrates ASTM compliance and feedstock provenance. The bill contains a single effective-date rule that governs when the reinstated calculation begins to apply to produced fuel, and it updates internal statutory references so the new SAF amounts appear in the Code’s cross-references.
The Five Things You Need to Know
The bill substitutes higher per-unit credit amounts for SAF in the section 45Z special-rate calculation: it replaces the previous 20-cent figure with 35 cents for facilities described in paragraph (2)(A), and replaces $1.00 with $1.75 for facilities described in paragraph (2)(B).
It defines "sustainable aviation fuel" by requiring conformance with ASTM International Standard D7566 or the Fischer–Tropsch provisions of ASTM D1655 (Annex A1) and explicitly excludes fuels derived from palm fatty acid distillates and petroleum.
The statute’s clean fuel production credit sunset for covered fuel is extended so that eligible fuel sold through December 31, 2033 remains within the program’s window.
The amendments apply prospectively to fuel produced after December 31, 2025, establishing the production cutoff for eligibility under the reinstated SAF rate.
The bill makes a conforming amendment to section 45Z(c)(1) so internal references list the new SAF amounts alongside the existing per-unit figures used elsewhere in the provision.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Short title — Securing America’s Fuels Act (SAF Act)
Provides the Act’s short title for reference. Practically this is the label under which the rest of the bill’s tax changes are codified; it carries no substantive legal effect but appears in the bill heading and any subsequent citations.
Reinstatement of special-rate calculation for SAF in section 45Z
Rewrites paragraph (3) of section 45Z(a) to create a stand-alone subparagraph titled 'Special rate for sustainable aviation fuel.' The text instructs the Code to apply alternate per-unit amounts — differing by the two facility categories already present in paragraph (2) — exclusively when the fuel qualifies as SAF under the statutory definition. This creates a layered structure: the baseline section 45Z framework remains, but SAF gets its own rate pathway within that framework.
Statutory definition of sustainable aviation fuel
Adds a definition that anchors qualification to existing ASTM fuel specifications (D7566 and the Fischer–Tropsch provisions of D1655, Annex A1) and declares that fuels derived from palm fatty acid distillates or petroleum are not SAF for these purposes. By delegating technical fuel quality to ASTM, the provision avoids creating a parallel certification body but shifts emphasis to provenance and feedstock exclusion as disqualifiers.
Cross-reference updates in section 45Z(c)(1)
Alters the internal text of section 45Z(c)(1) so that the subsection lists the new SAF per-unit amounts alongside the other amounts the Code references. This is a bookkeeping change that ensures statutory references to per-unit rates remain internally consistent after the reinstatement of the SAF-specific calculation.
Extension of credit window and effective date
Section 2(b) revises the program’s expiration language to push the credit’s applicability for fuel sales beyond the prior termination date; section 2(c) establishes that the amendments take effect for fuel produced after a specified production cutoff. Together these two rules change both when new SAF rates become available and the outer date for when fuel remains eligible under the credit scheme.
This bill is one of many.
Codify tracks hundreds of bills on Energy across all five countries.
Explore Energy in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- SAF producers and project developers — Higher per-unit tax credits improve internal rates of return and can help bridge the gap between SAF production costs and conventional jet fuel prices, making financing and offtake negotiations easier.
- Airlines and corporate buyers pursuing SAF offtake — Expanded and extended credits increase SAF supply prospects and reduce long-run price risk for firms procuring low‑carbon jet fuel to meet sustainability targets.
- Refiners and existing fuel blenders that qualify as a 'qualified facility' — Facilities that already meet the statute’s facility criteria can capture enhanced credits for SAF production without needing a new statutory category.
- Tax advisors and project financiers — The change creates new structuring opportunities (and demand for tax-credit-driven financing products) because SAF projects gain dedicated, higher per-unit incentives.
- ASTM‑compliant certification and testing providers — The statutory tie to ASTM standards increases demand for verification, testing, and documentation services to demonstrate eligibility.
Who Bears the Cost
- U.S. Treasury/federal budget — Raising per-unit credits and extending the program increases projected tax expenditures, creating larger fiscal outlays (in the form of foregone revenue) compared with the current-law baseline.
- Feedstock suppliers excluded by the bill (palm fatty acid distillates, petroleum) — Producers and sellers of excluded feedstocks lose access to the SAF-enhanced credit pathway, which could reduce demand and depress prices for those materials in SAF markets.
- Smaller or newer SAF entrants lacking ASTM‑certified pathways — Firms that cannot readily demonstrate conformance with the specified ASTM standards or trace feedstock provenance will face higher compliance costs or exclusion from the enhanced rates.
- Compliance and administrative units at the IRS and Treasury — The agency will absorb additional enforcement, documentation review, and audit workload tied to verifying ASTM conformance and feedstock exclusion claims.
- Non‑SAF renewable fuel producers — By redirecting a higher per-unit incentive specifically to SAF, other renewable fuel segments may find themselves relatively less competitive for the same pool of investment dollars.
Key Issues
The Core Tension
The central dilemma is between accelerating SAF deployment quickly by offering a larger, predictable tax incentive and managing fiscal and environmental integrity risks: a blunt, higher per-unit credit will mobilize investment but risks higher treasury costs and creates opportunities for gaming or unintended feedstock shifts unless paired with robust, administrable verification of fuel quality and lifecycle benefits.
The bill uses a technical, standards-based approach (ASTM references) rather than creating a new federal certification regime. That saves on immediate administrative complexity but creates reliance on a private standard-setting process for taxpayer eligibility.
Relying on ASTM means disputes over whether a fuel sample meets the standard could become taxable-eligibility disputes, shifting contested technical questions into the tax-audit space. The feedstock exclusions are blunt: excluding palm fatty acid distillates and petroleum targets known high-carbon sources, but the statutory text does not articulate a broader lifecycle-emissions test.
Producers could respond by shifting to other feedstocks whose lifecycle impacts vary, potentially producing perverse incentives unless combined with complementary lifecycle accounting elsewhere in policy.
On implementation, the IRS must verify both facility qualification under paragraph (2) and compliance with ASTM and feedstock provenance. Those verification tasks could be administratively burdensome and require new guidance (for example, what sort of supplier attestations or chain-of-custody records suffice).
From a fiscal perspective, higher per-unit credits and a longer program horizon materially increase the program’s projected cost, raising questions about targeting (who needs the enhanced rates most) and whether the credit should be calibrated to lifecycle emissions rather than feedstock lists alone.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.