S.692 - Sustainable Vessel Fuel Act (119th Congress)
Summary
The Sustainable Vessel Fuel Act (S.692) proposes amendments to the Internal Revenue Code of 1986, specifically Section 45Z, to include sustainable vessel fuel within the clean fuel production credit. This bill aims to incentivize the production and use of sustainable vessel fuel by providing a special rate under the clean fuel production credit, similar to that for sustainable aviation fuel. The Act defines 'sustainable vessel fuel' and sets a termination date of December 31, 2035, for the credit related to this fuel.
Expected Effects
If enacted, this bill would likely increase the production and utilization of sustainable vessel fuels by making them more economically attractive through tax credits. This could lead to reduced emissions from commercial vessels and ferries. The bill also sets standards for sustainable vessel fuel, ensuring it meets certain environmental criteria.
Potential Benefits
- Reduced emissions from maritime transport.
- Incentivizes innovation in sustainable fuel technologies.
- Supports domestic production of sustainable fuels.
- Potentially lowers the cost of sustainable vessel fuel for consumers.
- Promotes energy independence by diversifying fuel sources.
Potential Disadvantages
- Potential for increased tax burden on other sectors to offset the credit.
- Complexity in defining and verifying 'sustainable vessel fuel'.
- Risk of unintended consequences or loopholes in the legislation.
- Possible market distortion due to government subsidies.
- Limited impact if the adoption of sustainable vessel fuel remains low.
Constitutional Alignment
The bill aligns with the General Welfare Clause of the Constitution (Preamble), as it aims to promote environmental sustainability and potentially stimulate economic activity. Congress has the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States (Article I, Section 8, Clause 1). The bill falls under Congress's power to regulate commerce (Article I, Section 8, Clause 3) as it affects maritime transport and fuel production.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).