Clean Fuel Production Credit

The Clean Fuel Production Credit is a newly established tax credit for clean fuel production, available beginning January 1, 2025. The income tax credit is for the domestic production of clean transportation fuel, which is divided into two broad categories:

sustainable aviation fuel (SAF) and
non-SAF transportation fuel.

A taxpayer cannot claim a Clean Fuel Production Credit unless the taxpayer is registered as a producer of clean fuel at the time of production.

The credit is equal to the product of:

the applicable amount per gallon (or gallon equivalent) for any transportation fuel that is produced by the taxpayer at a qualified facility during the taxable year sold by the taxpayer in a qualifying sale and
the emissions factor for such fuel as determined under the Code.

How to claim the credit

Taxpayers will first need to register using Form 637, Application for Registration (For Certain Excise Tax Activities) under Activity Letter “CN” (producer of non-SAF transportation fuel) or Activity Letter “CA” (producer of SAF), or both, as appropriate.