Rep. Mike Thompson, D-Calif., on Oct. 28 introduced a bill that aims to reinstate many of the renewable energy tax credits eliminated by the One Big Beautiful Bill. One provision of the legislation would reinstate the 45Z clean fuel production credit premium for sustainable aviation fuel (SAF).The original 45Z tax credit, as established by the Inflation Reduction Act of 2022, provided a tax credit for the production and sale of low-emission transformation fuels. The credit started at 20 cents per gallon for non-aviation fuels and 35 cents per gallon for sustainable aviation fuel (SAF). For facilities that satisfy the prevailing wage and apprenticeship requirements, the value of the tax credit was up to $1 per gallon for non-aviation fuels and $1.75 per gallon for SAF. Under the IRA, the 45Z credit was available for 2025, 2026 and 2027.&nbsp;President Trump on July 4 signed the One Big Beautiful Bill Act, a budget reconciliation package that extended the 45Z credit through the end of 2029, altered the credit by limiting eligibility to fuels derived from feedstocks produced or grown in the U.S., Canada or Mexico, and eliminated the “special rate” for SAF. The elimination of the “special rate” effectively caps the value of the SAF credit at $1 per gallon starting in 2026.&nbsp;The Energy Independence and Affordability Act, introduced by Thompson on Oct. 28, aims to reinstate the “special rate” for SAF in line with the original version of the 45Z credit.&nbsp;The legislation also includes provisions to restore various other energy tax incentives established by the Inflation Reduction Act and eliminated by the One Big Beautiful Bill. This includes:&nbsp;<ul style="list-style-type:disc;"><li>Extending the Section 45Y clean energy production credit until at least 2032 or until the annual greenhouse gas (GHG) emissions from the production of electricity in the U.S. are less than 25% of the annual GHG emissions from the production of electricity in the U.S. for 2022.</li><li>Repealing the termination of the 48E clean electricity investment credit for wind and solar.</li><li>Reversion of the construction date for the 45V clean hydrogen production credit from Jan. 1, 2028, to Jan. 1, 2033.</li><li>Reversion of the termination for the 25D residential clean energy credit from Dec. 31, 2025, to Dec. 31, 2034. Certain biomass wood stoves and boilers are among the appliances eligible for the 25D credit. &nbsp;</li><li>Reversion of the termination date for the 30D clean vehicle credit from Sept. 30, 2025, to Dec. 31, 2032.</li><li>Reversion of the termination date for the 45W qualified commercial clean vehicles credit from Sept. 30, 2025, to Dec. 31, 2032.</li><li>Reversion of the termination date for the 30C alternative fuel vehicle refueling property credit from June 30, 2026, to Dec. 31, 2032. The credit supports the installation of refueling property to supply biodiesel, ethanol, electricity, hydrogen fuel cells, natural gas, plug-in-hybrid electric vehicles and propane.&nbsp;</li></ul>&nbsp;Following its introduction, the Energy Independence and Affordability Act was referred to the House Committee on Ways and Means. To date, 114 democratic members of the U.S. House of Representatives has signed on to cosponsor the bill. Additional information is available on the Congress.gov <a href="https://www.congress.gov/bill/119th-congress/house-bill/5862?s=1&amp;r=1">website</a> under H.R. 5862.&nbsp;

2025-10-30 - Bill aims to reinstate 45Z ‘special rate’ for SAF, other renewable energy tax incentives eliminated by OBBB (4 publications)

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Rep. Mike Thompson, D-Calif., on Oct. 28 introduced a bill that aims to reinstate many of the renewable energy tax credits eliminated by the One Big Beautiful Bill, including the reinstatement of the 45Z clean fuel production credit “special rate” for SAF. 

Bill aims to reinstate 45Z ‘special rate’ for SAF, other renewable energy tax incentives eliminated by OBBB

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