US to fall short of 2030 SAF target; EU ramp-up to struggle after 2027

SkyNRG's report has found that feedstock supply shortages present an enormous challenge for the US and EU to meet SAF mandates; more farm and forest wastes are required

Both the EU and the US face huge challenges in terms of finding sufficient feedstocks to meet mandates or targets for sustainable aviation fuel (SAF) and will be hugely reliant on nascent technologies, a new report from SkyNRG has found.

In its second major survey of the global SAF market, Netherlands-based SkyNRG – a major supplier of the product – said that rapidly-tightening supplies of standard waste-based feedstocks such as used cooking oil (UCO) in the US and Europe will frustrate both markets in reaching biojet supply targets.

The company added that huge volumes of corn-based ethanol and farm/forest wastes will be required to make up the difference.

“In terms of additional announcements [for Europe] we see a waste oil market that is becoming increasingly tight as renewable diesel and SAF plants come online in the coming years,” SkyNRG said.

“If energy independence is prioritized by European policymakers, the additional post-2028 demand would need to be met with mostly Europe-based production capacity,” the report added.

“Given feedstock supply constraints, these announcements would likely have to come from non-waste oil pathways,” the supplier said.

In the US, production by 2030 could be just a third of the 8.6 million tonnes target set by the White House last September, the report said, mainly due to insufficient supply of wastes and a lack of production pathway and feedstock varieties.

The conclusions come at a critical juncture for policymakers on both sides of the Atlantic as they shape legislation that will underpin biojet mandates, eligibility rules, and fiscal incentives.

The findings are always likely to be of keen interest to airlines – SkyNRG’s customers – and producers of SAF that are signing larger volumes of offtake agreements that in turn require visibility on feedstock supply.

The report said that because members of the European Parliament are considering major amendments that could cap the amount of UCO and animal fats that can be used in SAF to meet an EU mandate, Europe’s reliance on cellulosic wastes (for Alcohol-to-Jet and Fischer-Tropsch pathways) and Power-to-Liquids (PtL, otherwise known as e-fuels).

“Demonstration plants will remain important proof points for further deployment of these technologies and further ramp-up of SAF production,” the report said, referring to pilot facilities being developed by SAF producers in the US including Fulcrum and LanzaJet that also intend to construct production plants in Europe.

Despite a tightening feedstock market, SkyNRG said it expects SAF production in Europe to ramp up more sharply than it estimated in its previous report, with 2 million tonnes expected to be supplied by 2024, up from its earlier estimate of 1.4 million tonnes.

The higher estimate is based on additional announcements in the EU, and SAF plants earmarked for the UK, which is also planning for a mandate from 2025, with SkyNRG expecting 23 plants to be operating in Europe by 2027, compared with an assumption of 15 biojet facilities made in its previous report.

But even though an additional 0.6 million tonnes supply is expected, all of that is due to come online by 2027, with 2.7 million tonnes earmarked from Europe’s SAF facilities and no further additions expected before the 2030s as feedstock constraints for HEFA stymie growth in the late 2020s.

SAF feedstocks and technology diversification

That outcome would come at a time when the EU is likely to be poised to increase its mandate to 5% in 2030, after which it ramps up in increments to 32% by 2040 and 63% by 2050.

The nearer-term feedstock supply issue is likely to be a major talking point among MEPs who will vote on the bloc’s mandate in May and again in June ahead of the trilogue co-decision process later in the year.

“Post-2030 targets are in danger if we fail to align incentives with a need for technology diversification,” the report said, noting that a cap on Annex IX Part B feedstocks “could generate the needed market push in time.”

Huge shortfall in US SAF

In the US, which would be the world’s biggest SAF market if targets are met, SkyNRG concluded that meeting the 3 billion gallon (8.6 million tonnes) challenge set by the White House for 2030 is conditional upon “rapid feedstock and technology diversification”.

The report noted that current SAF announcements in the US rely predominantly on an “optimistic” expectation on availability of fats, oils, and greases (FOGs), adding that a “significant pipeline of renewable diesel projects in the US will prohibit new SAF announcements from accessing FOG feedstocks”.

That likely bottleneck will mean that the US will be strongly reliant on corn-based ethanol used in the ATJ pathway being developed by LanzaJet, Gevo, and others.

Lifecycle emissions

But this will require this feedstock to sharply reduce its life-cycle carbon emissions sufficiently to qualify for proposed Blender’s Tax Credits that are triggered by emissions reductions of at least 50%, compared with the average 35% reductions achieved on average by ethanol supplied to road transport.

All told, “the US is likely to be about 2.1 billion gallons short of meeting the 2030 production goal,” SkyNEG said, basing its analysis on all announced renewable fuel projects that would have 0.9 billion gallons of SAF capacity expected to be online by 2030.

Alternative pathways

The report said that diversification of feedstocks and production pathways for SAF in the US will be required, including hub-and-spoke supply chains, where cellulosics are converted into second-generation ethanol at decentralized locations but centrally upgraded to jet fuel in large refineries and the development of green hydrogen.

“Such developments are however all contingent on policy incentives that are aligned with this need for technology diversification and up-scaling, as well as flanking measures that ensure that the availability of key inputs like renewable power become is accelerated,” the report said.

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