Platts to modify IRA tax credit to calculate Renewable Diesel R100 price assessment

Platts, part of S&P Global Commodity Insights, will modify the federal tax credit for its renewable diesel (RD100) price assessment in Los Angeles and San Francisco, effective Jan. 2, 2025.

This change aligns with the transition under the Inflation Reduction Act. Effective Jan. 1, 2025, the blender's tax credit will be replaced by the Clean Fuel Production credit. Platts will monitor further guidance on the transition of the IRA tax credit.

The new federal tax credit provides a maximum of $1 per gallon for non-SAF fuels for producers meeting prevailing wage and registered apprenticeship requirements, requiring a maximum carbon intensity of 50 kgCO2/MMBTU. The credit amount will be proportional to the level of emissions reduction achieved, up to the full credit.

Platts will still consider CARB's Renewable Diesel's Carbon Intensity of 37.01 gCO2e/MJ, from Substitute Pathways for Reporting Fuels with Unknown CI for 2024.

Platts will calculate the credit multiplying the lifecycle greenhouse gas emissions reduction percentage by the maximum credit price, $1/gal.

Platts will calculate lifecycle greenhouse gas emissions reduction percentage as a fraction, the numerator of which is the maximum carbon intensity (50 kgCO2/MMBTU) minus the RD CI of 37.01 gCO2e/MJ (or 39.05 kgCO2/MMBTU) and the denominator of which is the maximum carbon intensity. The credit will be rounded to the nearest hundredth cent.

(50 - 39.05)/50 x 100 cents/gal = 21.90 cents/gal

Therefore, the total RD tax credit Platts will use in RD100, is 21.90 cents/gal.

Please submit any feedback, comments or questions about this proposal to mrts_biofuelsandfeedstocks@spglobal.com and pricegroup@spglobal.com.

For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing.

Platts will consider all comments received and will make comments not marked as confidential available upon request.