IRA clean fuel production credit expires, ending subsidies for sustainable aviation fuel and biodiesel

The Inflation Reduction Act's clean fuel production credit (Section 45Z), which covers sustainable aviation fuel, biodiesel, and other low-carbon liquid fuels, expires on December 31, 2029. The credit applies to fuel produced after December 31, 2024, and provides a baseline of $0.20 per gallon for transportation fuels that meet greenhouse gas intensity standards, scaling up for lower-carbon fuels. Airlines and fuel producers that have built production capacity around the credit face a fiscal cliff at expiration. The One Big Beautiful Bill Act did not extend it. The credit's expiration coincides with the SALT cap reversion, creating a multi-front tax cliff Congress must address heading into 2030.