A Holistic Look at SAF & GREET Opportunity Factors

Bushels of Benefits Ahead for Farmers and Ethanol Producers

Key Legislative Takeaways: The Foundation for What Lies Ahead

Following more than 16 months of build-up and anticipation, the U.S. Treasury finally released guidance around the 40B Sustainable Aviation Fuel (SAF) tax credit (part of the Inflation Reduction Act of 2022).

Both agriculture and biofuels industries have been waiting to see what exactly unfolds around guidance parameters, eligibility, and applicability of both the tax credits and updated Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) model (released simultaneously on April 30, 2024).

As SAF is Launched, Obvious System Checks and Balances Still Needed

Pinion’s Donna Funk, CPA and lead biofuels advisor provides these key takeaways:

“I think this release was a good starting point to understand what the Clean Fuels Production tax credit (45Z) guidance might look like (expected to be released in late 2024 or early 2025).

Whereas the 40B credit is not going to be a widely utilized credit, it does provide a decent amount of insight into the structure of 45Z – which is anticipated to be utilized at a much higher level with greater accessibility to benefits for biofuel companies.”

Regarding the impact of this SAF release on the agriculture industry,

more specifically the corn and soy feedstocks who stand to benefit, Funk says:

“We are expecting some complicated conversations ahead, but are hopeful that a healthy group of ag growers, as well as biofuels companies, will have opportunities to benefit."

Next Steps...

Pinion will be monitoring conversations for the remainder of the year surrounding the under-defined bundling concept practices, potential expansions of eligibility requirements, and the parameters around applicability and strategy expected to come from 45Z. 

Reach out to a Pinion advisor with questions, and sign up to receive our newsletters to get the latest updates and thought leadership around tax and legislative impacts to your business:

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Laura Sands

 

Lead Ag Advisor 

Funk_Donna

             Donna Funk

             Lead Biofuels Advisor