February 24, 2025
Ms. Hirono introduced the following bill; which was read twice and referred to the Committee on Finance
To amend the Internal Revenue Code of 1986 to modify the clean fuel production credit to provide a special rate for sustainable vessel fuel.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
Section 1. Short title
This Act may be cited as the Sustainable Vessel Fuel Act
.
Sec. 2. Special rate under clean fuel production credit for sustainable vessel fuel
(a) In general
Section 45Z(a)(3) of the Internal Revenue Code of 1986 is amended—
(1)
in the heading, by inserting and sustainable vessel fuel
after sustainable aviation fuel
,
(2)
in subparagraph (A), by inserting or sustainable vessel fuel
after sustainable aviation fuel
, and
(3)
in subparagraph (B), by striking this subparagraph (A)
and inserting this section
.
(b) Inclusion as transportation fuel
Section 45Z(d)(5) of the Internal Revenue Code of 1986 is amended—
(1)
by redesignating subparagraph (B) as subparagraph (C), and
(2)
by inserting after subparagraph (A) the following new subparagraph:
(B) Sustainable vessel fuel
(i) In general
The term transportation fuel shall include sustainable vessel fuel which satisfies the requirement under subparagraph (A)(iii).
(ii) Definition
The term sustainable vessel fuel means liquid fuel which—
(I)
is suitable for use as a fuel in a commercial vessel or ferry (as such terms are defined in section 4462(a)(4)) and is sold for such use,
(II)
is not derived from palm fatty acid distillates or petroleum,
(III)
as determined pursuant to subsection (b)(1), has an emissions rate of zero, and
(IV)
satisfies the requirements of any standards which have been identified by the Secretary pursuant to clause (iii).
(iii) Standards
The Secretary shall identify any standards as are established by the American Society for Testing and Materials (or similar standards organization) with respect to liquid fuel described in subclauses (I) through (III) of clause (ii) which the Secretary determines appropriate to carry out the purposes of this subparagraph.
(c) Termination
Section 45Z(g) of the Internal Revenue Code of 1986 is amended by inserting (or, in the case of transportation fuel which is sustainable vessel fuel, December 31, 2035)
after December 31, 2027
.
(d) Effective date
The amendments made by this section shall apply to fuel produced after December 31, 2025.