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aviation technologies, which are technologies that significantly improve aircraft fuel
efficiency or reduce greenhouse gas emissions. These programs are a part of the Biden
Administration’s comprehensive strategy to deploy technologies to produce sustainable
aviation fuels on a commercial scale, including the Sustainable Aviation Fuel Grand
Challenge, a joint effort of the Department of Energy, Department of Transportation, and
Department of Agriculture.

Programs Covered in This Chapter
Tax
IRA
Agency Code Program Name Amount
Section
Section
40A, Extension of Tax Credits for Biodiesel and
Department of the Treasury 13201 6426(c), Renewable Diesel -
6427(e)

6426(d), Extension of Tax Credit for Alternative
Department of the Treasury 13201 6426(e), Fuels
6427(e)
Department of the Treasury 13202 40 Extension of Second-Generation Biofuel -
Incentives
Department of the Treasury 13704 45Z Clean Fuel Production Credit -
Biofuel Infrastructure and Agriculture
Department of Agriculture 22003 - Product Market Expansion (Higher Blend $500,000,000
Infrastructure Incentive Program)
Environmental Protection 60108 - Funding for Section 211 of the Clean Air $15,000,000
Agency Act
Department of the Treasury 13203 40B Sustainable Aviation Fuel Credit -
Fueling Aviation’s Sustainable Transition
Department of Transportation 40007(a)(1) - $244,530,000
through Sustainable Aviation Fuels
Fueling Aviation’s Sustainable Transition –
Department of Transportation 40007(a)(2) - $46,530,000
Technology

The Clean Fuel Production Credit (45Z) is eligible for direct pay. Section 13801 of the
Inflation Reduction Act, adding Section 6417 of the Internal Revenue Code, extends many of the
law’s tax incentives, including the 45Z credit, to entities that generally do not benefit from
income tax credits, such as state, local, and Tribal governments and other tax-exempt entities.
Specifically, these entities can elect to receive these tax credits in the form of direct payments.
The 45Z tax credit also is transferable. Section 13801 adds Section 6418 of the Internal
Revenue Code and makes certain tax credits transferable. Taxpayers that are generally ineligible
for direct payment of credits may transfer all or a portion of certain credits to an unrelated party
in exchange for cash.

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