The CLEAR Skies Act would create a new production tax credit to encourage the development and sale of lead-free aviation gasoline in the United States. Specifically, it establishes a per-gallon credit for qualified aviation gasoline produced and sold to unrelated buyers, with the credit amount starting at $1.25 per gallon in 2026 and stepping down each year until 2030. The bill defines “qualified aviation gasoline” as fuel that is lead-free (no tetra-ethyl-lead), meets applicable aviation fuel standards, produced in the United States, and transferred to an aircraft within the United States. It also adds the credit to the general business tax credit framework and sets up a registration and certification regime for producers, with regulatory guidance to be issued within 180 days of enactment. The measure would sunset for sales after December 31, 2030. The bill also requires a Government Accountability Office (GAO) study on unleaded aviation gas pricing and the impact of the credit, with a report due within one year of enactment.
Key Points
- 1Establishes a per-gallon aviation gasoline production credit (Sec. 45BB) for qualified, lead-free aviation gasoline sold to unrelated buyers, with the credit amount varying from $1.25/gal in 2026 down to $1.05/gal in 2030.
- 2Defines qualified aviation gasoline as lead-free, meeting specified aviation fuel standards, produced in the U.S., and transferred to an aircraft in the U.S.; sales conditions include sales to unrelated buyers for business use or to retail outlets.
- 3Requires producers to register with the IRS (Sec. 4101) and obtain certification that their gasoline is qualified aviation gasoline; regulations to implement with DOT input due within 180 days of enactment.
- 4Expands tax treatment by making the credit part of the general business credit and clarifies that qualified aviation gasoline is included in aviation fuel tax provisions; effective for fuel sold or used after December 31, 2025.
- 5Includes a GAO study (Sec. 3) on the price dynamics of unleaded versus leaded aviation gas, drivers of price differentials, whether the credit lowers end-user costs, and market share/projections for unleaded aviation gas, with a final report due within one year of enactment.