SAF production is increasing, but aviation has a long way to go

American sustainable fuel technology company LanzaJet has announced earlier this week that it has reached a “major construction milestone” at its Freedom Pines Fuels jet fuel facility in Soperton, Georgia. The announcement reflects a broader trend that sustainable aviation fuel (SAF) production is gaining momentum, both in terms of production capacity and production routes. LanzaJet’s Freedom Pines Fuels facility, which claims to be the world’s first ethanol-based SAF plant, is expected to have the capacity to produce 10 million gallons (38 million liters) of SAF and renewable diesel per year starting in 2023.

Data compiled by the International Air Transport Association (IATA) shows that as of November 2022, around 115 renewable fuel projects have been publicly announced, spanning 30 countries and more than 70 individual manufacturers. Their combined refining capacity, which includes renewable biodiesel, biogas, and SAF, is set to grow by more than 400 percent by 2025 compared to 2022 and reach approximately 80 million tons, or 100 billion liters, of renewable fuel by 2030.

If aviation can provide 30 percent of that production, airlines will be able to pump 24 million tons, or 30 billion liters, of SAF in 2030, the industry group estimates. This will account for 6.5 percent of the world’s aviation fuel supply.

Expanding SAF production to meet demand

IATA predicts that total SAF year-end production in 2022 will reach 300 million to 450 million liters, representing just 0.1 to 0.15 percent of global jet fuel consumption. Global SAF production was just 24 million liters in 2019.

“Will we see more production? yes. Are we there? No.” IATA Director General Willie Walsh spoke to reporters during the trade organization’s recent Global Media Days in Geneva. Airlines have committed to achieving net zero carbon emissions by 2050, and analysts estimate that SAF will help reduce the industry’s carbon emissions by 65 percent. This would require an annual production of 360 million tonnes or 450 billion liters of SAF by 2050.

However, the production of 24 million tonnes by 2030 will be a ‘tipping point’ towards the industry’s net-zero ambitions,” noted Hemant Mistry, IATA’s Director of Energy Transition. This would provide a critical mass from which ramping up SAF production to the level needed to achieve net zero would be more manageable, he explained.

“There were at least three times more SAF on the market in 2022 than in 2021. And the airlines used every drop, even at very high prices,” commented Walsh. “If there was more, it would have been purchased. It makes it clear that this is a supply problem and that market forces alone are not enough to solve it.” He hit out at fuel manufacturers, whom he criticized for waiting too long to finalize the SAF. “Traditional fuel suppliers have benefited significantly from the revenue streams from our industry, and yet few, if any, have made a real investment in SAF production,” Walsh said. “We want to see not only new participants [investing in SAF capacity] but also traditional fuel suppliers.’

Government support and control of the SAF

The IATA chief reiterated his call for governments to provide the right financial incentives for SAF production. In the U.S., Walsh said, “they’ve recognized that the SAF is a big part of the answer, and they’re very focused on additive manufacturing.”

The US Inflation Reduction Act, which President Joe Biden signed into law in August, provides for a competitive SAF grant program and a combination of tax credits to help boost the nation’s SAF production to at least 11.3 billion liters (3 billion gallons) a year. until 2030.

For the European Union (EU), on the other hand, the approach “focuses on the stick, not the gingerbread,” noted Conrad Clifford, IATA’s senior vice president and deputy director general. Under its ReFuelEU Aviation legislative proposal, the EU plans to oblige airlines to raise the SAF by at least two percent at every European airport from 2025. The proposal calls for a gradual increase to 63 percent of SAF’s share of the fuel mix by 2050 and special sub-commitments for synthetic aviation fuel, gradually increasing from a minimum share of 0.7 percent in 2030 to 28 percent in 2050. The details are still being discussed between the EU institutions, for example the European Parliament is in favor of a higher minimum consumption of SAF.

“It makes no sense to establish something that cannot be bought,” Walsh stressed. “Europe’s response to the problem is punishing people,” he said. He gave the example of France, which applied a minimum of 1 percent SAF mixture from January 1, 2022, but the country has virtually no SAF. The fuel supplier must pay a penalty if the SAF is not supplied. “They’re just passing the fine on to the airlines,” Walsh lamented.

According to IATA, companies have announced 115 projects to start or scale up renewable fuel production, but “we need to ensure greater geographic spread and we also need diversification of production routes,” Mistry said. More than 80 percent of reported total renewable fuel production, and thus SAF, is based on hydrotreated esters and fatty acids. According to IATA data, between 2022 and 2027, 56 new projects will appear on the network, with Europe set to take the lead in the number of projects, followed by the Americas (32) and the Asia-Pacific region (20). However, the Americas are believed to be the region that will produce the largest amount of fuel.