The production of cleaner jet fuel is showing signs of booming in the U.S. and around the world, advancing the best tool for reducing aviation emissions in the short term.
Airlines are committing to buying millions of gallons of so-called sustainable aviation fuel (SAF) to meet their net-zero emissions goals, and producers are ramping up capacity significantly. According to industry officials, this sets the stage for exponential growth over the next decade.
Global production of clean fuels to reach at least 80 million gallons by 2022 – an estimated 200% increase from 2021 levels – putting the biofuels industry on track to reach the expected “tipping point” of around 8 billion gallons produced annually According to the International Air Transport Association (IATA), 2030.
“I’ve seen all the pieces come together faster than at any other time in my career,” said Michael McAdams, president of the Association for Advanced Biofuels. Pretty girl at the low carbon fuel prom, I see a lot of momentum right now.”
The projected growth is nowhere near enough to meet global demand — SAF consumption hit 60 billion gallons last year — but the growth is seen as an important step for the aviation industry, which is under increasing pressure to decarbonize.
Cleaner jet fuel made from renewable sources such as agricultural waste is more expensive than conventional jet fuel, but advocates say it could cut aviation emissions by up to 80 percent. Before electricity can power planes on a large scale, it could become the mainstay of cutting aircraft emissions, which account for 3% of all carbon dioxide released into the atmosphere.
IATA, which represents about 300 airlines, estimates that by mid-century, cleaner fuels will account for about 65% of the carbon reductions aviation needs to achieve net-zero emissions, a goal agreed to by more than 190 nations in October.
“There is still a huge mountain to climb to get to net-zero emissions from aviation,” said Scott Lewis, president of World Energy LLC, North America’s first commercial-scale producer of SAF. “That’s why we have to start now. We have to Using all the technology we can, we need to keep the developers of new technologies working like crazy.”
Industry leaders attribute the increase in production to a variety of factors, including technological innovations, greater investment in production facilities, greater commitment from airlines and stronger support from governments, including the Biden administration.
President Joe Biden has pushed for greater adoption of cleaner fuels as part of his climate agenda. The government launched the “SAF Grand Challenge” last year to stimulate inter-agency collaboration and investment with the goal of expanding domestic SAF production to 3 billion gallons per year by 2030.
The Lower Inflation Act signed by Biden in August includes tax credits for SAF production over the next five years, which industry officials say will help lower costs while boosting demand (Climate Line12 August).
Airlines, facing criticism for relying on carbon offsets to go green, have increasingly committed to using cleaner fuels. So far this year, airlines have announced some 40 purchase agreements with SAF producers, according to IATA.
JetBlue said last week it was shifting its net-zero strategy from carbon offsets to a “science-based” approach that prioritizes clean fuels. Delta Air Lines Inc. has committed to replacing 10 percent of jet fuel with SAF by 2030. UPS hopes to power nearly a third of its fleet with SAFs by 2035.
World Energy is spending $4 billion to increase its annual production to 500 million gallons by 2026 and 1 billion gallons by 2030. Another U.S. producer, LanzaJet Inc., says it will be able to sell 1 billion gallons a year by 2030. And Neste Oyj, a Finnish company, plans to expand annual production to 495 million gallons by the end of 2023.
Despite rapid growth, the production sector needs stronger policy support and greater investment to meet its ambitious decarbonization goals, according to a recent report Rhodium Consulting Reporta research firm.
Eric O’Rear, senior analyst at the Rhodium Group, said the announced commitments by airlines so far “have not been enough to really ramp up SAF production” to the levels needed for clean aviation. “As we can invest more in SAF production pathways, we can see those pathways reach some commercial scale sooner.”
Investments in R&D can help accelerate this shift by reducing production costs, which in turn can attract more funding for supply chain development and new facilities. This could make the price of SAF more competitive with conventional jet fuel, the report said.
The Advanced Biofuels Association’s McAdams said tax credits in the Lower Inflation Act would help boost production, but he lamented their five-year sunset, saying more time was needed to attract capital to build larger production facilities .
Rhodium Group said additional government policies could “de-risk” SAF plant investments, mandate consumption by airlines and facilitate research progress through public-private partnerships.
“We can’t be too optimistic, it’s a challenging path,” World Energy’s Lewis said. “People have to band together on this and really create the industry at the scale that needs to be there to make a difference.”
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