In the largest such arrangement of its kind involving the business aviation sector, Avfuel has struck a deal to purchase one billion gallons of sustainable aviation fuel (SAF) from biocrude specialist Alder Fuels over the next 20 years, the companies said today. In addition, the Ann Arbor, Michigan-based company will provide logistics support and expertise, and its Avfuel Technology Initiatives Corp. (ATIC) subsidiary further, has agreed to invest millions into Alder Fuels to help the company scale production.
Alder Fuels is developing production facilities that will convert abundant biomass, such as forest and crop residue, into a low-carbon replacement fuel that will meet jet-A specifications once refined. The refined fuel is in the process of being certified as a 100 percent drop-in replacement for petroleum-based jet-A and is anticipated to become available in the first quarter of 2024. Alder Fuels CEO and founder Bryan Sherbacow called the product “SAF 2.0” in that it is the next-generation version of SAF.
“Our fuel is indicating from the testing we've done and the initial work we're doing with ASTM that this fuel will meet the full specification of jet-A 100 percent neat, meaning we're not going to need to blend it with petroleum fuel,” Sherbacow told AIN. Unlike earlier versions of SAF, the Alder fuel has properties that eliminate the need for aromatics that require a petroleum blend.
Avfuel will supply the SAF to its business and commercial aviation customers globally, but said the agreement marks the first long-term offtake from a fuel supplier and the largest in business aviation history.
The agreement will help business aviation realize its commitment to obtaining net-zero status by 2050, Avfuel added.
“Avfuel is committed to providing sustainable solutions for its customers, including business aviation, fixed-based operators, and airlines,” said Avfuel executive v-p C.R. Sincock. “We have been a forerunner in supplying SAF to business aviation and this transformative agreement builds upon our commitment to lead its adoption.”
Sincock added that the ATIC investment is designed to ensure SAF will be available for the industry. “This is an important milestone in business aviation’s SAF adoption story, but we realize reaching net-zero targets will require a collective effort industry-wide to provide and embrace sustainable fuels. Only together can we reach this new height.”
Sincock told AIN that Avfuel has always tried to remain progressive, looking at what the industry would need five or 10 years out. “In the last decade, focus has shifted to the fuel has a technology and the role it can play in decarbonization,” he said. “Based on our research, while there’s going to be a fair amount of electrification for some short-range aircraft, it’s unlikely to really make a major dent in the fuel requirements for many decades.” That makes a need for SAF more important, he said.
Avfuel has worked with various SAF providers and continues to do so, he said. But in looking at “SAF 2.0,” Avfuel began to contemplate what the next generation would be, whether it would be scalable, and if it could be delivered at a reasonable price with the right environmental attributes.
U.S. forestry and agricultural residues make a strong candidate for SAF, the companies believe, citing Department of Energy statistics that they could provide enough biomass energy to displace 75 percent of U.S. aviation fuel consumption. Coupled with regenerative agricultural practices, that could capture more carbon in healthier soil compared with traditional methods, they added the U.S. could generate an additional seven billion gallons of SAF—on pace to replace current fossil jet fuel consumption.
“Imagine we can eliminate the harmful carbon added to our atmosphere when refining oil to jet fuel. Alder’s technology delivers this dream by converting globally available biomass to green crude oil scalable to meet the aviation industry’s demand at a cost competitive with petroleum,” said Sherbacow. “Today, Avfuel’s historic SAF contract and investment once again demonstrates its global leadership in business and commercial aviation fuel supply by helping Alder and the industry establish an international logistics and supply network for zero-carbon SAF.”
Alder has not specified where it plans to produce the fuel, but Sherbacow said it likely will begin in the U.S. and plans would be able to expand so it could be accessible at a reasonable rate throughout the states. He noted most SAF is now produced on the West Coast because states such as California have adopted significant incentives. His hope is that environment would be replicated elsewhere.
To reach scale, though, Alder is looking at potential production globally and has already publicly announced a partnership with the government of Columbia.
While prices have narrowed somewhat for SAF, especially given the escalation of oil, the costs will further come down once production is scaled, and demand continues to increase. Sherbacow called business aviation an important component of demand, because “we actually get direct conversations with the leaders of the company very quickly and very directly.” This creates demand that, in a complementary manner, spreads to the airline side.
He added that it is important to get the market on board since business aviation uses numerous airports that commercial aviation cannot reach.
While historic in terms of business aviation, the latest agreement is the second major announcement from Alder. United Airlines and Honeywell last year teamed up with an investment and commitment to buy 1.5 billion gallons from Alder. Sherbacow also previously built the world's first SAF refinery in collaboration with Honeywell and United Airlines in Paramount, California. Alder further has research supported by the U.S. Defense Logistics Agency.