Announced sustainable aviation fuel projects represent over three billion gallons of annual domestic production capacity in the United States by 2030, surpassing the target set under the US SAF Grand Challenge target, finds a new report from the US Department of Energy (DOE). The announced capacity correlates to over 10% of projected US jet fuel demand, over $44 billion of investment and more than 70,000 jobs across the SAF value chain, says the report, which will be presented at COP29 in Baku on November 21. The biggest barrier to SAF scale-up remains its price, which is currently two to ten times more than fossil jet fuel, says DOE, depending on the feedstock and conversion technology used to produce it. In October, DOE’s Loan Programs Office announced conditional commitments to issue over $1.4 billion dollars in loan guarantees each to renewable fuels companies Montana Renewables and Gevo Net-Zero 1 to help finance their SAF production facilities.

Aviation represents 3.3% of total US GHG emissions and jet fuel consumption is forecasted to increase by 2-3% annually through to 2050, says DOE, with SAF “the only viable solution” to decarbonising the sector in the near-term. The SAF Grand Challenge, established in September 2021 by government and industry, set a target of three billion and 35 billion gallons of annual SAF production in 2030 and 2050 respectively, representing 10% and 100% of projected US jet fuel demand. Current US SAF production is around 2,000 barrels per day, or about 20 million gallons per year.

The ‘SAF Pathways to Commercial Liftoff’ report looks at the near-term potential for SAF and analyses the technical and commercial readiness of several SAF production pathways, highlighting what DOE describes as “the tangible, actionable steps that both the public and private sector can take to make the United States a global leader in SAF production as soon as 2030.” Part of the DOE’s Liftoff series, it looks at market challenges, investment needs and critical pathways for deploying sustainable solutions at scale.

In order to achieve “SAF liftoff” by 2030, the report acknowledges it will require accelerated deployment of production technologies and feedstocks that are now readily available. In parallel, investments in emerging SAF technologies, such as next-generation feedstocks and innovative SAF conversion technologies, are “essential” to ensure 100% of jet fuel can be sustainable by 2050, it says.

To help make SAF more cost competitive with fossil jet, federal and state incentives are playing a necessary role but the report finds that sustained price premiums have limited airlines’ voluntary offtake.

“Long-term offtake agreements will establish the demand certainty needed both to improve financing terms and stimulate investment across the SAF value chain,” says DOE. “Airlines and producers can extend terms or increase volumes by activating third-party offtakers that are willing to pay for the environmental attribute (carbon abatement) of this low-carbon fuel to reduce their Scope 3 emissions. This activation will require the incorporation of SAF in Scope 3 emissions standards.”

The report adds that SAF liftoff will require international policy coordination, including alignment on carbon accounting, feedstock traceability and book-and-claim systems.

“With the aviation sector growing each year, there is no better time to invest in solutions that are both technologically and commercially ready today,” commented US Secretary of Energy Jennifer Granholm. “The latest in DOE’s Liftoff series, this report lays out the critical innovations and investments needed to drive down costs and further scale SAF production – paving the way for a cleaner, more competitive aviation sector that will benefit communities and businesses nationwide.”

DOE will host a webinar on November 21 featuring its senior leaders, including Dr Vanessa Chan, Chief Commercialization Officer and Director of the US Department of Energy’s Office of Technology Transitions (OTT), to outline the findings of the report.

The two commitments announced by DOE’s Loan Programs Office last month included a $1.44 billion loan guarantee to Montana Renewables, which if finalised, will help finance the expansion of a renewable fuels facility in Great Falls, Montana, that will utilize vegetable oils, fats and greases to produce SAF, renewable diesel and renewable naphtha. The other is a $1.46 billion loan guarantee to Gevo Net-Zero 1, to help finance the first-of-a-kind, large-scale corn starch-to-jet fuel facility in the United States. Located in Lake Preston, South Dakota, this facility will source US-grown, low-cost, low-carbon field corn and will use carbon capture and sequestration and renewable power to lower emissions.

Photo (Delta): Shipments of camelina-derived SAF produced by Montana Renewables were delivered via pipeline in October to Delta’s hubs at Minneapolis-St Paul and Detroit Metropolitan airports

Following their multi-year agreement, Montana Renewables has begun first shipments of sustainable aviation fuel to Shell Aviation for onward delivery to Shell’s US customers that include JetBlue, Alaska Airlines and Delta Air Lines. Montana Renewables claims it will be producing around 30 million gallons of SAF per year and make it the largest SAF producer in North America, with plans to significantly increase that amount over the next two to three years. The company’s location is close to major feedstock sources in the US and Canada, including the temperate oil seed growing zone and large farm and ranch operations in the region. Shell and its affiliates are expanding and building supply chain capabilities to blend and distribute SAF throughout the United States to enable more customers with access to the fuel.

“We’re proud to collaborate with Shell to improve aviation sustainability,” said Bruce Fleming, CEO Montana Renewables (MRL). “Strong support from the State of Montana, Cascade County and the City of Great Falls made possible the unique speed of Montana Renewables, and Shell is the logical offtake partner for us to reach multiple airlines and airports from our geographically advantaged site. We are now producing more SAF than any other North American company, on top of our renewable diesel and renewable hydrogen.”

MRL, whose renewable fuels plant began operations in late 2022 following investment of over $1 billion since Calumet acquired the business in 2012, has applied for International Sustainability & Carbon Certification (ISCC) CORSIA certification. It is permitted for 15,000 barrels per stream day of renewable feedstocks, which include seed oils, used cooking oil and tallow, for conversion into low-emission alternatives.

In April, Delta announced an agreement to purchase 10 million gallons of neat SAF from Shell Aviation, to be used over two years at Los Angeles International Airport. The agreement also includes testing the Avelia blockchain-powered digital book-and-claim platform launched by Shell Aviation and its partners last year.

“This is a great example of the kind of action and investment needed in states across our country that we need to meet our aggressive SAF goals as an industry,” said Pam Fletcher, the airline’s Chief Sustainability Officer. “There’s not enough SAF being produced today to power the world’s commercial airlines for a single day, so we’re grateful to everyone at the State of Montana, Montana Renewables and Shell for providing the incentives and taking meaningful steps towards scaling production of this largest known lever we have for decarbonising aviation.”

According to Delta’s ESG Report for 2022, the airline has a goal of replacing 10% of its jet fuel consumption by 10% by the end of 2030 and expects this to require at least 400 million gallons of SAF annually. At the end of 2022, Delta had agreements in place, “subject to third-party investment and timely facility development”, with multiple suppliers for an aggregate offtake of 200 million gallons towards the 2030 target.

“We continue to purchase from and align with leaders in the SAF industry to accelerate our yearly procurement,” says the report.

Photo: Shell Aviation

Christopher Surgenor

Editor

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