The Challenges with SAF

The Sustainable Aviation Fuel Grand Challenge Roadmap recognizes the importance of the aviation industry and its impact on the overall economy. Decarbonizing this transportation system segment is critical to support the continued growth of the aviation industry and economy. Among many goals set in the roadmap is the U.S. aviation industry reaching net zero carbon by 2050. While light-duty cars and trucks are making a slow transition to electric power, there is no easy electrification option for the aviation sector, which is why deploying new SAF technologies is critical.

The roadmap lists various renewable feedstocks that could be used to make SAF, including biomass sources such as fats, oils and greases (FOG), algae oil and wet waste. Estimated volumes of renewable fuel that can be produced by established technology pathways include: 48.8 billion gallons per year (BGY) from biomass and municipal solid waste; 1.85 BGY from FOG; 3.28 BGY from wet waste; and 24 BGY from algae oil. Thus, the total resource base provided in the roadmap can generate about 78 BGY. These projected yields are conservative with respect to the conversion technology, but it is aggressive to assume 100% of potential feedstocks can be gathered and processed. According to the U.S. EIA, projected U.S. transportation fuel demand in 2050 is about 183 BGY.

To date, projects have been difficult to scale due to distribution of feedstocks. Proposed plants using biomass or MSW tend to be in the 15 million gallons per year (MMgy) to 75 MMgy range. The projects based on FOG have the potential for larger scale, as the feedstock is more easily gathered and transported to a central plant. However, this option is very limited.

Soy oil is an example of an SAF Grand Challenge Roadmap feedstock, but it and other FOGs only account for a portion of 1.85 BGY. Soy oil is extracted from the soy plant leaving meal, which has a market, as does the oil. Farmland is used to plant major crops like soybeans, and the products are used in food markets. Shifting production to increase soy oil for fuel production could disrupt or imbalance food markets, and this tends to limit growth for this feedstock.

Biomass and MSW are more complicated feedstocks to utilize. Once gasified to make synthesis gas, they can be converted into liquid hydrocarbons via Fischer Tropsch (FT) synthesis and further refined into jet and diesel fuel products. Biomass from forest products or crop waste are not as sensitive to the food vs. fuel balance, but they still must be managed. They also have a cost to generate, gather and deliver to a plant. Transportation costs limit the practical size of biomass to renewable fuels projects. Small, distributed projects located near a particular feedstock will be the norm for most plants. Assuming an average size of 35 MMgy, utilizing the total biomass resource base of 48.8 BGY will require about 1,400 biofuel plants. While there is enough fuel potential from this resource base to completely decarbonize the aviation sector, this is only enough fuel for about 27% of our total transportation fuel needs. Based on biomass-to-liquids projects that have been built, an average capital cost of about $350,000 per barrel of daily capacity requires investments nearing $1.2 trillion to transition just 27% of our hydrocarbon products to renewable sources.

In recent years, there has been growing interest in capturing CO2 from ethanol plants, smokestacks or directly from the air or seawater, to split to yield carbon monoxide (CO) and oxygen. Water can be split by electrolysis to make hydrogen. Hydrogen and CO (synthesis gas) are the building blocks for FT hydrocarbon products. This pathway represents a virtually unlimited method to recycle fuel products, making them carbon neutral, but it requires a lot of carbon-free energy. With this option, we have no limits on decarbonization. What can be directly electrified will be; the rest can be indirectly electrified with efuels. As a reference point, consider this: Our current electric grid generation capacity is about 1.1 million megawatt-hours (MWh). It must grow to 1.9 million MWh by 2050 to accommodate the anticipated electric vehicles and market growth, and at least an additional 1.1 million MWh to make the liquid transportation fuels needed to completely decarbonize the U.S. And it is only truly decarbonized if the electricity comes from carbon-free sources.

These carbon-neutral fuels will require trillions of dollars in capital investments, resulting in a much higher price than we have been accustomed to paying. Therefore, government incentives in the form of penalties or taxes for not adopting them, or in the form of credits and direct payments to producers, will be required to enable production and growth of these fuels.

The level of commitment from industry and government alike to transition from fossil fuels to electricity or carbon-neutral fuels has grown substantially in recent years. This effort to decarbonize may be led by the aviation industry, but will not stop until all segments are substantially converted.

Darling Ingredients Inc. and Valero Energy Corp. have announced a final investment decision on a sustainable aviation fuel (SAF) project at the Diamond Green Diesel Port Arthur, Texas, plant, which is owned and operated by Diamond Green Diesel Holdings LLC, a 50/50 joint venture between Valero and Darling.

Upon completion of the project, which is expected in 2025, the DGD Port Arthur plant will have the capability to upgrade approximately 50% of its current 470 MMgy capacity to SAF. The project's estimated cost is approximately $315 million, with half of that attributable to Darling Ingredients. With the completion of this project, DGD is expected to become one of the largest SAF manufacturers in the world.

Illinois Gov. JB Pritzker on Feb. 3 signed the Invest in Illinois Act, a legislative package that, in part, creates a $1.50 per gallon SAF purchase tax credit to support its supply and use within the state. The SAF tax credit will become effective June 1 and is currently in place through Jan. 1, 2033. The credit applies to SAF sold to or used by an air carrier. To be eligible for the credit, SAF must achieve a 50% lifecycle greenhouse gas reduction when compared to petroleum-based jet fuel using either the lifecycle methodology for SAF developed by the International Civil Aviation Organization, or the most recent version of Argonne National Laboratory’s GREET model.

Prior to June 1, 2028, the credit can be claimed for fuel derived from biomass resources, waste streams, renewable energy sources, or gaseous carbon oxides. Beginning on June 1, 2028, the fuel must also be derived from domestic biomass resources. Fuel produced from palm feedstock is not eligible for the credit. The new law also includes a provision that states until July 1, 2033, on an annual basis, no credit may be earned by an air carrier for soybean oil-derived SAF once air carriers in the state have collectively purchased SAF containing 10 million gallons of soybean oil feedstock.

Equilon Enterprises LLC (Shell) and S&W Seed Co. have executed an agreement to establish a joint venture (JV) for the purpose of developing novel plant genetics for oil seed cover crops as feedstocks for biofuel production. The JV company, named Vision Bioenergy Oilseeds LLC, will be jointly owned by Shell and S&W.

The JV intends to develop camelina and other oilseed species from which oil and meal can be extracted. S&W will contribute its expertise in seed research, technology, production and processing to the JV, including its seed processing and research facilities in Nampa, Idaho. The JV expects to carry out initial grain production in late 2023.

Fulcrum BioEnergy Inc. announced that its United Kingdom subsidiary, Fulcrum BioEnergy Ltd., has received a grant of approximately £16.8 million ($20.2 million) from the U.K. Department for Transport Advanced Fuels Fund. The grant, which runs through 2025, will support development of Fulcrum NorthPoint, a residual waste-to-SAF facility that will be located at the Essar Stanlow Manufacturing Complex in Ellesmere Port, Cheshire, in northwest England. Part of the grant will be utilized to fund engineering activities for the plant, which is expected to have the capacity to transform roughly 600,000 metric tons of residual waste into approximately 100 million liters (approx. 26.4 million gallons) of low-carbon SAF per year when it enters operations in 2027.

Boeing has agreed to purchase Neste MY Sustainable Aviation Fuel supplied by EPIC Fuels, Signature Aviation and Avfuel to power its U.S. commercial operations through 2023. These fuel purchases more than double Boeing's SAF procurement from last year. Neste’s SAF will be blended with conventional jet fuel at a 30/70 ratio to produce 5.6 million gallons of blended SAF.

Sasol, a global chemicals and energy company, and Topsoe, a global provider of carbon emission reduction technologies, have signed a memorandum of understanding with the intent to establish a 50/50 joint venture (JV) in 2023 to produce SAF. The companies seek to enhance and enable faster SAF production development through the establishment of the JV, which will produce SAF derived from feedstocks including green hydrogen, sustainable sources of CO2 and biomass, based on Sasol’s Fischer Tropsch process and Topsoe’s relevant SAF technologies.

United Airlines has launched the United Airlines Ventures Sustainable Flight Fund, a first-of-its-kind investment vehicle designed to support start-ups focused on decarbonizing air travel by accelerating the research, production and technologies associated with SAF. The fund starts with more than $100 million in investments from United Airlines and its inaugural partners Air Canada, Boeing, GE Aerospace, JPMorgan Chase, and Honeywell. Through the fund, these and potentially additional corporate participants will invest alongside United in SAF technology and production startups identified by United. In the past two years alone, United Airlines Ventures has invested in start-ups such as Cemvita, Dimensional Energy, and NEXT Renewable Fuels.

Johnson Matthey and bp reported that their codeveloped Fischer Tropsch (FT) CANS technology has been selected by Strategic Biofuels for its project that aims to produce the world’s lowest-carbon-footprint liquid fuel.

The technology has been licensed to Strategic Biofuels for the company’s Louisiana Green Fuels project in Caldwell Parish, Louisiana. Located on a 327-acre site at the Port of Columbia, the LGF plant plans to convert 1 million tons of forestry waste feedstock into cleaner-burning renewable diesel, and is projected to produce 31.8 million gallons of biofuels per year once in operation. The aim is to increase production to over 165 million gallons per year of renewable diesel and SAF over 10 to 12 years.

The LGF plant currently aims to be operational by early 2027 and is expected to produce about 87% renewable diesel and 13% bionaphtha. Strategic Biofuels is planning to utilize carbon capture and sequestration technology at its LGF plant to further drive down carbon emissions.

U.S. operable biofuels production capacity was up in November, with gains for both ethanol and renewable diesel, according to data released by the U.S. Energy Information Administration on Jan. 31. Total feedstock consumption was up slightly from October.

Total operable biofuels capacity reached 21.941 billion gallons in November, up 540 million gallons when compared to the 21.401 billion gallons of capacity in place in October. When compared to November 2021, capacity was up 979 million gallons. Ethanol capacity reached 17.179 billion gallons in November, up 4 million gallons when compared to the 17.175 billion gallons of capacity in place the previous month, but down 292 million gallons when compared to the 17.467 billion gallons of capacity in place as of November 2021.

Biodiesel capacity was at 2.092 billion gallons in November, flat with the previous month, but down 297 million gallons when compared to the 2.389 billion gallons of capacity reported for the same month of the previous year. Capacity for renewable diesel and associated fuels, including renewable heating oil, renewable jet fuel, renewable naphtha, renewable gasoline, and other biofuels and biointermediates, expanded to 2.67 billion gallons in November, up 536 million gallons when compared to October. Capacity was up 1.564 billion gallons when compared to the 1.106 billion gallons of capacity in place as of November 2021.

The consortium of Masdar, TotalEnergies, Siemens Energy and Marubeni announced that the Masdar-led initiative focused on green hydrogen to produce SAF is actively working with licensors to certify a new production pathway for SAF from methanol. The consortium has been collaborating with the Abu Dhabi Department of Energy, Etihad Airways, Lufthansa Group, and Khalifa University of Science and Technology, on a demonstration initiative for eSAF. Since January 2021, the partners in the initiative have completed a range of evaluations on technology suppliers, feasibility studies and conceptual designs, while working closely with regulators on compliance issues. The consortium has now zoned in on the methanolto-jet pathway as its chosen technology route.

The Washington State Senate on March 1 voted 46 to 2 in favor of a bill that aims to encourage the manufacture and purchase of SAF though tax incentives. The bill also directs Washington State University to convene a working group to further development of alternative jet fuels. The bill, SB 5447, was introduced Jan. 18. Following its March 1 passage by the Washington Senate, the bill was transferred to the Washington House of Representatives.

Regarding tax incentives, the bill aims to create a preferential business and operations (B&O) tax rate of 0.275 percent for the manufacturing and wholesaling of alternative jet fuels. The bill would also establish a B&O and public utilities tax credit for certain sales and purchases of alternative jet fuel. The amount of the credit would be $1 per gallon of alternative jet fuel that has at least 50% less carbon dioxide equivalent emissions than conventional jet fuel. The credit would increase by 2 cents for each additional 1 percent reduction beyond 50% with a cap of $2 per gallon.

With support from Safran Helicopter Engines, TotalEnergies, Airbus Helicopters and France’s defense procurement agency (Direction Générale de l’Armement-DGA) have carried out the first test flight of an NH90, during which one of its two RTM322 engines ran on SAF. The fuel was produced by TotalEnergies from used cooking oil using hydroprocessed esters and fatty acids technology and has a carbon footprint four times less than that of a fossil fuel. As such, it meets the European Union's 65% abatement requirement for sustainable fuels. The test flight took place on Feb. 3 and marks a first for a military helicopter with such a high content of SAF, and without any engine modification.