US airlines pledge huge increase in use of sustainable aviation fuel by 2030
Following a promise from the White House to fund, develop and incentivize aviation biofuel, US airlines are pledging to use 3 billion gallons by 2030.
By John McGarrity, senior editor for Fastmarkets Energy Census
US airlines are targeting to use 3 billion gallons a year of sustainable aviation fuel (SAF) a year by 2030 after the White House announced late Thursday September 9 it would co-ordinate policies and provide new funding, development and fiscal incentives for aviation biofuel — part of wider plans to cut the sector’s emissions 20% by the end of the decade.
The White House’s push for greater co-ordination between federal government departments and the aviation and biofuels sector is an attempt to build on the Biden administration’s commitment earlier this year to a dedicated Blender’s Tax Credit for SAF production if it achieves a minimum 50% reduction in carbon emissions.
“Today, President Biden is taking steps to coordinate leadership and innovation across the federal government, aircraft manufacturers, airlines, fuel producers, airports, and non-governmental organizations to advance the use of cleaner and more sustainable fuels in American aviation,” the White House said in the statement.
The White House added that the aim to raise consumption of SAF to 3 billion gallons a year by 2030 – a figure that is a 50% increase on the previous commitment from the Airlines for America lobby group – would make a major contribution to cutting emissions in the US aviation sector 20% from business as usual levels by the end of the decade.
The Biden administration said that cuts in aviation emissions would be essential if the US transport sector is to deliver its required share of carbon reductions as part of wider climate commitments.
Among the announcements from the White House yesterday was a proposal – termed as a ‘memorandum of understanding’, for a SAF “grand challenge” to draw on the resources of the Departments of Energy, Transport and Agriculture to encourage greater investment, research and development in SAF.
Through what the White House called a “whole of government” approach, these three federal government departments would be required to set up an executive team to co-ordinate with the Environmental Protection Agency and other agencies to deliver aims such as higher investments in SAF, the use of novel feedstocks, scaled-up testing of SAF and enhanced efforts at commercialising biojet.
As part of the initiative, the USDA will be required to support US farmers with “climate-smart” agriculture practices and research, including “genetic development, sustainable crop and forest management at scale, and post-harvest supply chain logistics”, and the same agency would also support fuel producers with carbon modeling components of aviation biofuel feedstocks.
Arriving at an accurate measurement of carbon reductions delivered by particular feedstocks and production pathways will be crucial for novel types of SAF to earn a dedicated blender’s tax credit supported by the White House and introduced as bills to Congress by Democratic lawmakers.
Under the terms of the proposed tax credit, suppliers of SAF would earn between $1.50 and $2 per gallon, with the exact amount tied to calculations of carbon savings achieved above the 50% minimum threshold.
SAF producers say that a BTC will be crucial to reducing much of the wide price gap between biojet and kerosene and help financing of new production facilities, particularly for new pathways that are currently in the development stage.
A new in-depth report published this month by Fastmarkets estimates that although global supply of SAF could be 3 million metric tons (1 billion gallons) by 2025, a 30-fold increase from estimated current production capacity, at least 80% of that will be biojet based on hydroprocessed esters and fatty acids (HEFA).
This type of biojet is currently the only available alternative to fossil kerosene and is dependent on the same supplies of waste fats, oils and crop wastes that are used in standard biodiesel and renewable diesel for road transport, prompting fears of a supply crunch later this decade.
Other pathways such as alcohol-to-jet and Fischer-Tropsch are expected to take a major share of SAF supply in the second half of this decade but face big challenges in terms of securing sufficient waste feedstocks and scaling up the process technology beyond the demonstration phase.
The study also concludes that fiscal incentives, demand drivers such as mandates, and technical support from governments and public agencies will be essential to get sufficient private sector financing so that plants in the project pipeline get built and commissioned.
This article, by John McGarrity, was first published to energycensus.com on Friday September 10.