SECTION 3. DEFINITIONS

.01 In general . This section provides definitions that apply for purposes of this notice. Section 3.02 of this notice provides generally applicable definitions. Section 3.03 of this notice provides definitions related to non-SAF transportation fuels. Section 3.04 of this notice provides definitions related to SAF.

.02 Generally applicable definitions . (1) Applicable material . Section 45Z(d)(5)(B)(i) defines the term “applicable material” to mean (I) monoglycerides, diglycerides, and triglycerides, (II) free fatty acids, and (III) fatty acid esters.

(2) ASTM or ASTM International . References in this notice to “ASTM” or “ASTM International” are references to specifications published by ASTM International (formerly ASTM). Additional information about ASTM International is available at https://www.astm.org.

(3) Biomass . Section 45Z(d)(5)(B)(ii) gives the term “biomass” the same meaning given such term in § 45K(c)(3). Section 45K(c)(3) defines the term “biomass” to mean any organic material other than (A) oil and natural gas (or any product thereof), and (B) coal (including lignite) or any product thereof.

(4) CO2e . Section 45Z(d)(2) defines the term “CO2e” to mean, with respect to any greenhouse gas, the equivalent carbon dioxide (as determined based on relative global warming potential).

(5) Greenhouse gas . Section 45Z(d)(3) gives the term “greenhouse gas” the same meaning given that term under section 211(o)(1)(G) of the CAA, as in effect on August 16, 2022.

(6) mmBTU . Section 45Z(d)(1) defines the term “mmBTU” to mean 1,000,000 British thermal units.

(7) Qualified facility . Under § 45Z(d) (4), the term “qualified facility” means a facility used for the production of transportation fuels, and does not include any facility for which one of the following credits is allowed under § 38 for the taxable year: (i) the credit for production of clean hydrogen under § 45V, (ii) the credit determined under § 46 to the extent that such credit is attributable to the energy credit determined under § 48 with respect to any specified clean hydrogen production facility for which an election is made

under § 48(a)(15), and (iii) the credit for carbon oxide sequestration under § 45Q.

(8) Sale . Under § 45Z(a)(1)(A)(ii) and (a)(4), a sale for purposes of the § 45Z credit occurs when the transportation fuel is sold by the taxpayer to an unrelated person (A) for use by such person in the production of a fuel mixture, (B) for use by such person in a trade or business, or (C) who sells such fuel at retail to another person and places such fuel in the fuel tank of such other person.

(9) Transportation fuel . Section 45Z(d) (5)(A) defines the term “transportation fuel” to mean a fuel which (i) is suitable for use in a highway vehicle or aircraft, (ii) has an emissions rate which is not greater than 50 kilograms (kg) of CO2e per mmBTU, and (iii) is not derived from co-processing an applicable material (or materials derived from an applicable material) with a feedstock which is not biomass. The term “transportation fuel” includes non-SAF transportation fuel and SAF.

.03 Definitions applicable to non-SAF transportation fuels .

(1) Low-GHG biodiesel . The term “low-GHG biodiesel” means the monoalkyl esters of long chain fatty acids that meet the specifications of ASTM International D6751 and that have an emissions rate that is not greater than 50 kg of CO2e per mmBTU.

(2) Low-GHG butanol . The term “lowGHG butanol” means any mixture of n-butyl, sec-butyl, and iso-butyl alcohols that meets the specifications of ASTM International D7862 and that has an emissions rate that is not greater than 50 kg of CO2e per mmBTU.

(3) Low-GHG diesel fuel . The term “low-GHG diesel fuel” means liquid fuel, including renewable diesel, that meets the specifications of ASTM International D975 and that has an emissions rate that is not greater than 50 kg of CO2e per mmBTU.

(4) Low-GHG dimethyl ether . The term “low-GHG dimethyl ether,” which includes renewable dimethyl ether, means a gaseous fuel that meets the specifications of ASTM International D7901 and that has an emissions rate that is not greater than 50 kg of CO2e per mmBTU.

(5) Low-GHG ethanol . The term “lowGHG ethanol” means ethyl alcohol that is a liquid fuel that meets the specifica

tions of ASTM International D4806 for denatured fuel ethanol for blending with gasolines and that has an emissions rate that is not greater than 50 kg of CO2e per mmBTU.

(6) Low-GHG gasoline . The term “lowGHG gasoline,” which includes renewable gasoline, means liquid fuel that meets the specifications of ASTM International D4814 and that has an emissions rate that is not greater than 50 kg of CO2e per mmBTU.

(7) Low-GHG hydrogen . The term “low-GHG hydrogen” means any gaseous or liquid fuel that meets the requirements of the Society of Automotive Engineers (SAE) J2719 standard and that has an emissions rate that is not greater than 50 kg of CO2e per mmBTU. Information about SAE standards is available at https://www.sae.org/standards.

(8) Low-GHG liquefied petroleum gas (LPG) . The term “low-GHG LPG,” which includes low-GHG propane, means lowGHG liquefied gases that meet the specifications of ASTM International D1835 and that have an emissions rate that is not greater than 50 kg of CO2e per mmBTU.

(9) Low-GHG methanol . The term “low-GHG methanol” means a methyl alcohol that is a liquid fuel that meets the specifications of ASTM International D5797 and that has an emissions rate that is not greater than 50 kg of CO2e per mmBTU.

(10) Low-GHG natural gas . The term “low-GHG natural gas,” which includes renewable natural gas, means compressed or liquefied gas that meets the specifications of ASTM International D8080-21 and that has an emissions rate that is not greater than 50 kg of CO2e per mmBTU.

.04 Definitions applicable to SAF . (1) General definitions . (a) SAF or sustainable aviation fuel . Section 45Z(a)(3)(B) defines the term “sustainable aviation fuel” to mean the portion of liquid fuel that is not kerosene that is sold for use in an aircraft and (i) meets the requirements of either (I) ASTM International D7566 (further defined in section 3.04(2)(a) of this notice to mean the ASTM D7566 Annexes), or (II) the Fischer Tropsch provisions of ASTM D1655 Annex A1 (further defined in section 3.04(2)(b) of this notice to mean ASTM D1655 Annex A1 section A1.2.2.2); and (ii) is not derived from

June 24, 2024 1782 Bulletin No. 2024–26

palm fatty acid distillates or petroleum. For purposes of the § 45Z credit, SAF is a type of transportation fuel that must also meet the requirements of § 45Z(d)(5)(A). A liquid fuel that meets the specifications of one of the ASTM D7566 Annexes or meets the specifications of ASTM D1655 Annex A1, but does not meet the requirements of § 45Z(d)(5)(A), is not SAF and is therefore ineligible for the § 45Z credit.

For purposes of the § 45Z credit, SAF may be categorized as either (A) a liquid fuel that meets the specifications of one of the ASTM D7566 Annexes (SAF synthetic blending component), or (B) a co-processed liquid fuel that was produced by co-processing petroleum with synthesized hydrocarbons derived from synthesis gas via the Fischer Tropsch process (FT hydrocarbons).

(b) SAF FT hydrocarbons . The term “SAF FT hydrocarbons” means the FT hydrocarbons that are derived from biomass, used to produce jet fuel described in section A1.2.2.2 of ASTM D1655 Annex A1, and not derived from palm fatty acid distillates or petroleum. See section 3.04(2)(b) of this notice. (2) Definitions related to ASTM Inter- national specifications for SAF .

(a) ASTM D7566 Annexes . The term “ASTM D7566 Annexes” means any of the annexes in ASTM D7566 that provide the specifications for a pathway to create a synthetic blending component that can be blended with ASTM D1655 kerosene (as defined in section 3.04(2)(c) of this notice).

(b) ASTM D1655 Annex A1 . The term “ASTM D1655 Annex A1” means the Fischer Tropsch provisions of ASTM D1655 Annex A1 that are contained in section A1.2.2.2, which provides a pathway for co-processing up to five percent of FT hydrocarbons with petroleum to make a liquid fuel that qualifies as jet fuel. For purposes of this definition, the term “petroleum” includes any conventionally sourced hydrocarbons permitted under ASTM D1655 Annex A1.

Liquid fuel produced under section A1.2.2.1 does not qualify for the § 45Z credit because section A1.2.2.1 defines a pathway for producing a liquid fuel from co-processing an applicable material (or materials derived from an applicable material) with a feedstock that is not biomass (for example, petroleum), which § 45Z(d) (5)(A)(iii) excludes from the § 45Z credit. See section 3.02 of this notice.

(c) ASTM D1655 kerosene and ASTM D1655 compliant SAF . The term “ASTM D1655 kerosene” means petroleum-based kerosene that meets the specifications set forth in ASTM D1655 and does not include liquid fuel co-processed with FT hydrocarbons or the addition of a SAF synthetic blending component.

The term “ASTM D1655 compliant SAF” means ASTM D1655 kerosene that has been blended with a SAF synthetic blending component described in a specific ASTM D7566 Annex and meets the batch specifications described in ASTM D7566, Table 1. It also means kerosene produced by co-processing SAF FT hydrocarbons with petroleum under ASTM D1655 Annex A1. Once the mixture meets those batch specifications or is produced under ASTM D1655 Annex A1, the mixture may be regarded as jet fuel under ASTM D1655. ASTM D1655 compliant SAF is fully fungible with ASTM D1655 kerosene.

The terms “ASTM D1655 kerosene” and “ASTM D1655 compliant SAF” are not ASTM designations, but rather are used in this notice to distinguish between two types of fuel (for federal tax purposes) that qualify as jet fuel under the ASTM D1655 specifications for jet fuel.

(d) ASTM International D7566 . The term “ASTM International D7566” means the batch specifications set forth under ASTM D7566, Table 1, which includes the blending requirements for each synthetic blending component and the overall specifications and requirements for the blended mixture to be regarded as ASTM D1655 compliant SAF. Blending percent

age requirements for various synthetic blending components with ASTM D1655 kerosene are listed in section 6 of ASTM D7566 and range from 10 to 50 percent.