H.R. 1 expands 45Z clean fuel production credit for conventional biofuels while cutting sustainable aviation fuel tax credit

H.R. 1 expands the 45Z Clean Fuel Production Credit through 2029 but reduces the maximum credit for sustainable aviation fuel (SAF) from $1.75 to $1.00 per gallon. By excluding indirect land use change (ILUC) emissions from carbon intensity (CI) scores, the bill increases subsidies for conventional corn ethanol and soy biodiesel. The Joint Committee on Taxation estimates these changes will cost taxpayers $25.7 billion from FY25-34, a significant increase from previous estimates, without providing proportional greenhouse gas emission reductions.

• H.R. 1 modifies the 45Z Clean Fuel Production Credit by extending its availability through 2029 and lowering the maximum tax credit for sustainable aviation fuel (SAF) from $1.75 per gallon to $1.00 per gallon.
• The legislation excludes emissions from indirect land use change (ILUC) when calculating a fuel's carbon intensity (CI) score, which can lower CI scores for corn ethanol and soy biodiesel by 20-25 g CO2 e/MJ and result in higher tax credits for these conventional biofuels.
• The Joint Committee on Taxation (JCT) estimates that the modified 45Z credit will cost taxpayers $25.7 billion from FY25-34, a substantial increase compared to the initial IRA estimate of $2.9 billion over four years.
• The changes to 45Z are expected to disadvantage the domestic SAF industry and U.S. competitiveness by shifting incentives toward mature industries like soy-based renewable diesel, potentially leading companies to move SAF investments to other countries.

APA

Starr, R., & Lewis, J. (2025). H.R. 1 expands 45Z clean fuel production credit for conventional biofuels while cutting sustainable aviation fuel tax credit. Clean Air Task Force. https://www.catf.us/2025/10/h-r-1-expands-45z-clean-fuel-production-credit-for-conventional-biofuels-while-cutting-sustainable-aviation-fuel-tax-credit/

Chicago

Starr, Rachel, and Jonathan Lewis. H.R. 1 expands 45Z clean fuel production credit for conventional biofuels while cutting sustainable aviation fuel tax credit. Clean Air Task Force, 2025. https://www.catf.us/2025/10/h-r-1-expands-45z-clean-fuel-production-credit-for-conventional-biofuels-while-cutting-sustainable-aviation-fuel-tax-credit/.

Wikipedia

{{cite report |last1=Starr |first1=Rachel |last2=Lewis |first2=Jonathan |title=H.R. 1 expands 45Z clean fuel production credit for conventional biofuels while cutting sustainable aviation fuel tax credit |publisher=Clean Air Task Force |date=16 October 2025 |url=https://www.catf.us/2025/10/h-r-1-expands-45z-clean-fuel-production-credit-for-conventional-biofuels-while-cutting-sustainable-aviation-fuel-tax-credit/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{starr2025expands, author = {Starr, Rachel and Lewis, Jonathan}, title = {{H.R. 1 expands 45Z clean fuel production credit for conventional biofuels while cutting sustainable aviation fuel tax credit}}, institution = {Clean Air Task Force}, year = {2025}, month = oct, url = {https://www.catf.us/2025/10/h-r-1-expands-45z-clean-fuel-production-credit-for-conventional-biofuels-while-cutting-sustainable-aviation-fuel-tax-credit/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }