Motor Fuels Tax Minute, Episode 7

The Inflation Reduction Act is the topic for this week’s Motor Fuels Tax Minute. Join our hosts for an overview of the new legislation and its impact on the fuel taxes and credits.


For information or assistance, contact us. We are here to help.


Detailed Transcription of Weaver’s Motor Fuels Tax Minute, Episode 7


Emilda: Welcome to Weaver's Motor Fuels Tax Minute, where we talk all things motor fuels. This week we are talking about the Inflation Reduction Act. President Biden signed the legislation into law this week, which contains a number of fuel tax and credit related provisions. Over the next few videos, we will dive deeper into these provisions.

Today, we're sharing a high level summary of the new legislation.


Leanne: That's right, Emilda. Among the key provisions in this statute for motor fuel industry participants is an extension of the biodiesel credit through 2024, which was set to expire at the end of this year.

Another key provision includes a retroactive reinstatement and extension of the alternative fuel and second generation biofuel credit, both of which expired at the end of last year. These credits will now also expire at the end of 2024.

And there is a new mixture credit for sustainable aviation fuel. We'll look at this one in more detail in a later video. One of the key differences between this and the credit currently available for renewable jet fuel through the Renewable Diesel Program is that there's a greenhouse gas component. This credit becomes effective on January 1, 2023, and also lasts through 2024.


Emilda: Once these credits expire at the end of 2024, the statue moves away from blend credits and towards production credits for all biofuel types. There is a clean fuel production credit for domestic producers of biomass based transportation fuel and sustainable aviation fuel. This comes into effect January 2025.

The production credit has a greenhouse gas emission component to it that impacts the availability of the credit. Many of the details are expected to be fleshed out in regulations we anticipate will come from both the IRS and the EPA.


Leanne: There's still a lot of guidance coming forward that the industry needs.

Finally, in addition to all the new incentives for the biofuels, there's one old tax coming back. The hazardous Superfund financing fee, which is imposed with the oil spill tax, returns on January 1, 2023. And that's coming back at an increased rate of 16.4 cents per barrel.


Emilda: That's going to be an interesting topic, Leanne.

That is this week's Motor Fuels Tax Minute.

Stay tuned next week when we will be discussing some of these provisions in greater detail.

Weaver's Motor Fuels Tax Minute

Watch our Motor Fuels Tax Minute videos now.
Interested in receiving our monthly SALT Digest? Subscribe today!


Leanne Sobel

Leanne Sobel

Director, Motor Fuels and Excise Tax Services


Leanne Sobel, J.D., has over 15 years of experience in legal tax matters. Her career focus includes federal and state tax and…

Learn More