[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 692 Introduced in Senate (IS)]

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119th CONGRESS
  1st Session
                                 S. 692

  To amend the Internal Revenue Code of 1986 to modify the clean fuel 
  production credit to provide a special rate for sustainable vessel 
                                 fuel.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 24, 2025

  Ms. Hirono introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  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.
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