Sustainable Aviation Fuel (SAF)

Using jet fuel derived from more sustainable sources has the potential to be the most effective way to decarbonize our operations. We are committed to replacing 10% of our jet fuel with SAF by 2030, and our roadmap reflects a significant reliance on SAF to achieve our 2035 and 2050 goals. However, the production of SAF is a nascent industry; there are still very small volumes being produced and the cost of production is currently 2 to 5 times that of conventional jet fuel. Over the long term, the expectation is that SAF will be competitive with conventional jet fuel at scale, but incentives are needed in the short term to drive adoption. We recognize the challenges in scaling up SAF, and we are engaged with our industry partners, SAF producers, states and the federal government to help accelerate its production, availability and distribution at commercially viable prices.

We are currently focused on sourcing SAF in California, which is our largest market outside of Hawai‘i and where the state’s regulatory framework incentivizes uplift of SAF. In March 2023, we announced our commitment to purchase 10 million gallons of SAF annually over five years from Gevo, a SAF producer that plans to build multiple SAF facilities in the U.S. mid-west. The facility that will produce our SAF is expected to be completed by 2028 and reach full commercial volumes by 2029. This initial commitment is an important step forward, but we continue to seek additional supply of SAF to meet our considerably larger needs.

We are also working to develop SAF supply in our home state of Hawai‘i. In 2022, we announced a partnership with Par Hawaii (pictured above), the largest refiner in the state to explore SAF production. With Par, we are jointly focused on three areas: (1) conducting an engineering study to evaluate the feasibility of converting a portion of Par’s facilities to produce SAF, (2) exploring the potential to grow oil-yielding crops in Hawai‘i as well as import sustainable feedstock, and (3) evaluating the best policy mechanisms to advance SAF in Hawai‘i. We are making progress in all three areas, and are encouraged by Par’s plans to invest $90 million to develop the state’s largest liquid renewable fuels manufacturing facility at its Kapolei refinery. We are excited about the potential to produce SAF in Hawai‘i, which would supportthe decarbonization of aviation in Hawai‘i, establish a new green industry, and advance the state’s energy independence and economic development goals.