US treasury department, IRS issue notice on DOE update to 40BSAF-GREET 2024 model

The U.S. Department of the Treasury and Internal Revenue Service issued Notice 2024-74 Oct. 18 for the sustainable aviation fuel (SAF) credit created by the Inflation Reduction Act.

The new notice advises that the U.S. DOE released an updated version of the 40BSAF-GREET 2024 model and accompanying user manual in October that addresses a calculation issue related to catalyst inputs for the alcohol-to-jet (ATJ) SAF pathways.

This calculation issue relates to the proportion of catalyst used to produce certain amounts of SAF for which the April version does not account, resulting in inaccurate estimates of the emissions associated with the catalyst input, according to the Oct. 18 notice.

The October version changes the calculation of the ATJ SAF pathways by lowering the emissions associated with the catalyst input.

This was the only change to the 40BSAF-GREET 2024 model made in October.

The IRS noted that it and the treasury department have issued several notices regarding the SAF credit, including Notice 2024-37, which allows SAF producers to use the 40BSAF-GREET 2024 model to calculate the greenhouse-gas emissions-reduction percentage for purposes of the SAF credits.

The SAF credit ranges from $1.25 to $1.75 per gallon of SAF in a qualified mixture.

To qualify for the credit, the SAF must have a minimum reduction of 50 percent in lifecycle greenhouse-gas emissions.

Notice 2024-74 provides that a taxpayer who uses a 40BSAF-GREET 2024 safe harbor in Notice 2024-37 to calculate its emissions-reduction percentage with respect to claims that relate to the sale or use of a SAF qualified mixture after the effective date must use the new version of the 40BSAF-GREET 2024 model released in October.