U.S. sustainable fuel technology company LanzaJet announced earlier this week that it has reached a “major construction milestone” at its Freedom Pines Fuels alcohol-to-jet production facility in Soperton, Georgia. The announcement is representative of a wider trend that the production of sustainable aviation fuel (SAF) is gaining traction, both in terms of production capacity and production pathways. The LanzaJet Freedom Pines Fuels plant—which lays claim to being the world’s first ethanol-based SAF production facility—is expected to have the capacity to produce 10 million gallons (38 million liters) of SAF and renewable diesel a year, starting in 2023.
Data collected by the International Air Transport Association (IATA) shows that, as of November 2022, some 115 renewable fuel projects have been publicly announced, covering 30 countries and over 70 individual producers. Their combined refining capacity—comprising renewable biodiesel, biogas, as well as SAF—is set to grow by over 400 percent by 2025 compared to 2022 and reach around 80 million tonnes, or 100 billion liters, of renewable fuel by 2030.
The industry group estimates that if aviation can secure 30 percent of this production, airlines would be able to uplift 24 million tonnes or 30 billion liters of SAF in 2030. That would account for 6.5 percent of global aviation fuel uplift.
Upscaling SAF production to meet demand
IATA projects that total year-end SAF production for 2022 will reach between 300 million and 450 million liters, accounting for just 0.1 to 0.15 percent of global jet fuel use. Global SAF production was just 24 million liters back in 2019.
“Will we see more production? Yes. Are we there? No.” IATA director general Willie Walsh reflected with reporters during the trade body’s recent global media days in Geneva. Airlines have committed to achieving net zero carbon emissions by 2050 and analysts estimate that SAF will contribute 65 percent of the industry’s carbon dioxide emissions mitigation. That would require an annual production of 360 million tonnes or 450 billion liters of SAF by 2050.
Still, a production tally of 24 million tonnes by 2030 would mark a “tipping point” towards the industry’s net zero ambition,” Hemant Mistry, IATA’s director of energy transition, pointed out. It would provide a critical volume from where the upscaling of SAF production to the levels needed to get to net zero would be more manageable, he explained.
“There was at least triple the amount of SAF in the market in 2022 than in 2021. And airlines used every drop, even at very high prices," Walsh commented. "If more were available, it would have been purchased. That makes it clear that it is a supply issue and that market forces alone are insufficient to solve it.” He took a swipe at the fuel producers, which he criticized for waiting too long to refine SAF. “Traditional fuel suppliers have benefited significantly from revenue flows from our industry and yet few, if any of them, have put real investment into the production of SAF,” Walsh said. “We want to see not just new entrants [investing in SAF capacity] but also the traditional fuel suppliers.”
Governmental support and oversight of SAF
The IATA boss reiterated his call for governments to provide the right financial incentives for the production of SAF. In the U.S., Walsh said, “they have recognized that SAF is a big part of the answer, and they are heavily focused on additional production.”
The U.S. Inflation Reduction Act, which President Joe Biden signed into law in August, provides a competitive grant program for SAF and a combination of tax credits to help boost SAF production in the country to at least 11.3 billion liters (3 billion gallons) a year by 2030.
For the European Union (EU), on the other hand, the approach is “focusing on the stick and not the carrot,” noted Conrad Clifford, IATA senior vice president and deputy director general. Under its ReFuelEU Aviation legislative proposal, the EU is planning to mandate that airlines uplift at least two percent SAF at every European airport from 2025. The proposal sets out a gradual increase to a 63 percent share of SAF in the fuel blend by 2050 and a dedicated sub-obligation on synthetic aviation fuels that gradually increases from a minimum share of 0.7 percent in 2030 to 28 percent in 2050. Details are still being discussed between the EU institutions, with, for instance, the European Parliament advocating a higher minimum SAF uptake.
“Mandating something that is not available to buy does not make sense,” Walsh stressed. “Europe’s answer to the problem penalizes people,” he asserted. He cited the example of France which applied a minimum 1 percent SAF blend mandate since January 1, 2022, but there is barely any SAF available in the country. The fuel supplier has to pay a penalty if it fails to supply the SAF. “They just pass on the fine to the airlines,” Walsh lamented.
According to IATA, companies announced some 115 projects to start or ramp up renewable fuel production, but, “we need to ensure that there is improved geographic spread and we also need diversification of production pathways,” said Mistry. Over 80 percent of the announced total renewable fuel outputs and therefore SAF is based on hydro-processed esters and fatty acids. With 56 new projects to come online between 2022 and 2027, Europe is set to take the lead in the number of projects, followed by the Americas (32) and Asia Pacific (20), according to IATA data. However, the Americas ranks as the region that will produce the largest quantities of the fuel.