Though it's still a drop in the bucket compared with conventional jet fuel, the use of sustainable aviation fuel is poised to increase, with producers, aircraft manufacturers, airlines and governments working to surmount obstacles like higher cost and supply chain issues.
By Robert Silk
On a rainy afternoon this past January, I climbed aboard a Gulfstream G280 business jet at Van Nuys Airport in the Los Angeles area for a one-hour pleasure flight along the cloud-covered coast. One factor, however, set this flight apart from the overwhelming majority of flights that took off around the world that day: It was powered, in part, by sustainable aviation fuel (SAF).
Worldwide consumption of jet fuel in 2018 was approximately 90 billion gallons. But production of sustainable jet fuel amounted to a tiny fraction of that total — somewhere just north of 4 million gallons, the large majority of which was produced at a single refinery in the Los Angeles suburb of Paramount.
Eight years after Dutch carrier KLM flew the first commercial flight powered by SAF, use of renewable fuel in the aviation industry remains nascent. It’s a dilemma, say industry experts, caused by the large price gap between SAF and conventional jet fuel as well as by shortages in feedstock and the absence of a substantial supply chain. But as the commercial aviation industry prepares for the 2021 launch of a United Nations-sanctioned carbon-reduction scheme, there are at least signs that progress is in the offing.
“I expect pretty significant quantitative production [of SAF] in 2022 for sure,” said Steve Csonka, executive director of the Commercial Aviation Alternative Fuels Initiative, a coalition of aviation stakeholders including the FAA and the trade group Airlines for America, that was formed in 2006 to assist in bringing SAF to the market.
Last year, World Energy, owner of the Paramount refinery, produced 4 million gallons of renewable jet fuel, which comprised most of the world supply. Late in the year, however, World Energy was joined in the production business by Finland’s Neste, which resumed SAF production after taking a hiatus of several years due to a lack of demand. Colorado-based Gevo also produced 100,000 gallons of sustainable jet fuel last year, but on a batch basis rather than through standard refinery production.
Csonka’s assessment relating to future production is driven by the number of refineries that are either under construction or in the planning stages around the world.
In the under-construction category is the Lakeview, Ore., refinery of Red Rock Biofuels, which expects to produce 15 million gallons of SAF per year and has a targeted opening date of late this year.
Also under construction is an 11 million gallons-per-year refinery from California-based Fulcrum BioEnergy, just east of Reno, Nev. It’s slated to open in the first half of next year but won’t immediately produce SAF. However, the company does plan to upgrade the facility for SAF production, said vice president of administration Rick Barraza, who declined to elaborate on the timeline.
Fulcrum has also announced plans for a 2020 groundbreaking of a 33 million gallons-per-year refinery in Gary, Ind., to be split 50/50 between renewable diesel and SAF.
Neste, meanwhile, has announced it will increase production capacity at a renewable diesel plant it has in Singapore by 340 million gallons annually by 2022. The company plans to put a significant portion of that expansion capacity toward jet fuel, commercial development manager Lana Van Marter said.
Other companies that have announced plans to begin producing renewable jet fuel include Sweden’s Preem and Illinois-based LanzaTech, which plans a Georgia refinery. In addition, World Energy plans to increase its Paramount refinery capacity over the next two years from approximately 40 million gallons of renewable fuels annually to some 300 million gallons. The company expects to put about 60 million gallons of that capacity toward SAF, chief commercial officer Bryan Sherbacow told a gathering of business aviation executives at a conference at Van Nuys Airport in January.
All told, airlines have made commitments for the purchase of more than 250 million gallons of SAF annually, Csonka said. Production, he added, could reach that level by the end of 2022, depending on the pace at which projects are completed as well as on which projects under discussion actually move forward.
It’s enough to suggest the sustainable jet fuel industry is reaching a tipping point. But Csonka cautions that it’s important to maintain perspective. The U.S. alone produced 26 billion gallons of jet fuel last year. As such, 250 million gallons would account for less than 1% of that total.
“If you look at the total consumption and compare that against these announcements, it’s still a drop in the bucket figuratively, maybe literally,” he said.
Industry insiders say the primary barrier to a quicker ramp-up of SAF production is the price gap compared with conventional jet fuel.
“It really is the chicken-and-egg problem, the demand and the cost,” said Martin Struijker Boudier, marketing and communications manager for Amsterdam-based SkyNRG, an SAF distributor co-founded by KLM that is focused on developing supply chains for sustainable jet fuel.
Struijker Boudier said that SAF still costs two to three times as much as conventional kerosene-based jet fuel.
According to the International Energy Agency, which comprises 30 member countries, including the U.S., the additional cost an airline would pay per passenger to fly from London to New York with a blend of 15% SAF is $10. For airlines operating an especially efficient fleet, the number would be lower. But the number would increase if airlines purchase a higher blend of SAF. Current regulations allow for blend rates between SAF and conventional jet fuel of as much as 50/50.
Finnair, which has a program in which flyers can chose to cover the cost premium of SAF purchases, says the roundtrip difference on an intercontinental trip is about $73.
It’s not just price, however, that is standing in the way of a quicker scaling of SAF production. Feedstock supply and the lack of a robust supply chain are other primary issues.
Up to now, the large majority of SAF has been made from animal fats, vegetable oils and used cooking oils — a product known as HEFA-SPK, or hydroprocessed esters and fatty acids and synthetic paraffinic kerosene. However, advocates across the industry say that diversification is a must.
That process is underway. Along with HEFA-SPK, four fuel products produced from a variety of sources, including garbage, forestry residue, alcohol, sugars and even the outgases from steel production, have been approved for use in aircraft. The Fulcrum BioEnergy refineries outside Reno and in Gary, for example, will use trash for feedstock. The Red Rock Biofuels facility in Oregon will make use of wood chips.
Along with the five certified SAF pathways, 15 more are in the research and development phase, Csonka said, and some potential suppliers are pushing for renewable diesel to be approved as an SAF-blending agent, a step that would immediately increase production capacity substantially, since more than 1 billion gallons of renewable diesel were refined in 2018.
Supply chain issues are another constraint and correlate closely with the fact that so little SAF has thus far been produced. According to the International Energy Agency, more than 150,000 commercial flights using SAF have been operated. But while a number of airports — among them airports in Stockholm and Kalmar, Sweden; San Francisco; Bergen and Oslo, Norway; and Brisbane, Australia — have been regular launching points for such flights, Los Angeles’ LAX is the only commercial airport in the world that takes regular delivery of sustainable jet fuel.
LAX’s status as a pioneer when it comes to SAF supply is due in large part to commitments from United and KLM. United has had an off-take contract with World Energy predecessor AltAir since 2016. KLM, too, has taken a steady supply of World Energy fuel at LAX since 2016, but through a third-party contract with SkyNRG. Both carriers declined interview requests for this story, but Aaron Robinson, United’s senior manager of environmental strategy, recently told Aviation Week that World Energy supplies a million gallons of SAF to United annually for its LAX operations.
Tamara McCrossen-Orr, sustainability manager for Los Angeles World Airports, which oversees LAX, said the World Energy fuel is delivered to the airport via tanker truck, rather than by pipeline. Once it arrives, however, it is dropped directly into the airport’s fuel-supply system without complications.
“Every flight gets a tiny little molecule of renewable jet fuel,” she said. “But United and KLM paid for it.”
The Los Angeles supply chain would be improved by incorporating SAF delivery into the pipeline, McCrossen-Orr said.
Struijker Boudier said that SkyNRG, which has supplied SAF to more than 25 airlines, is involved in variety of supply chain innovation projects around the world, including efforts to organize its own direct supply lines at the regional level.
The day that I enjoyed that Southern California pleasure flight on a Gulfstream jet, it was actually the private aviation community, working under a newly created umbrella organization, the Sustainable Alternative Jet Fuel Initiative Coalition, that had gathered to pledge commitment to using SAF.
In fact, Gulfstream executives had powered their flight to Van Nuys from their Savannah, Ga., base with World Energy renewable fuel.
Commercial airlines, though, have also made commitments. According to the IEA, aviation accounts for roughly 2.5% of global energy-related carbon dioxide emissions, a figure that is expected to grow to 3.5% by 2030. To address the problem, the International Civil Aviation Organization, an arm of the United Nations, reached agreement on the Carbon Offset and Reduction Scheme for International Aviation (Corsia) in October 2016. Among the agreement’s backers are the U.S., the EU and most of the world’s largest countries in terms of aviation. IATA is also a proponent of the agreement.
Under its terms, air carriers that see emissions rise above 2020 levels would have to purchase carbon-offset credits to mitigate the increase. The regulations won’t apply to domestic air travel, which is regulated nation by nation. Implementation of the agreement will begin with a voluntary phase lasting from 2021 to 2027, after which it will become mandatory. All nations, except a few especially poor countries, will be required to participate at that time. The goal of the agreement is to reduce international aviation emissions to 50% of 2005 levels by 2050.
The emissions benefits of using sustainable jet fuel will vary depending upon the feedstock, the technology used at refineries and the efficiency of the supply chain. But in promotional materials airlines typically say it can provide emissions reductions of up to 80% in comparison with conventional jet fuel. Struijker Boudier cited the same figure for the SAF that SkyNRG brings to market and said it also provides a significant reduction in emissions of sulfur and other pollutants.
Some airlines have already demonstrated a significant commitment to pushing SAF development forward. Notably, United purchased a $30 million stake in Fulcrum BioEnergy in 2015 and entered into a partnership with the company for construction of up to five refineries near its hubs. Fulcrum’s planned Gary facility is to be one of those and will supply United at Chicago O’Hare.
Along with KLM, other airlines that have been leaders when it comes to SAF include Scandinavian carrier SAS, Virgin Australia, Qantas and JetBlue.
For those airlines more inclined to follow rather than lead on renewable fuel, Corsia will provide an incentive, since the lower emissions they’d produce using SAF would reduce the amount of money they’d be required to spend on carbon offsets.
Still, those in the renewables industry say that if SAF demand is to truly make strong strides, more direct action will be needed by governments.
One such step will be taken by Norway beginning next year, when it will require suppliers to ensure that at least 0.5% of the jet fuel they sell in the country comes from renewable sources.
California, meanwhile, took a different approach beginning Jan. 1 of this year when it included renewable jet fuel in its cap-and-trade regime called the Low Carbon Fuel Standard Program. With that inclusion, producers of SAF earn carbon credits, which they can then sell to producers of carbon-intensive fuels such as diesel and gasoline that are required to offset their polluting. SAF producers can then use those proceeds to lower prices.
But even in progressive California, SAF doesn’t enjoy all of the tax benefits that the more common renewable diesel does. That, Sherbacow said at January’s business aviation conference in Van Nuys, is a primary reason why World Energy is planning to dedicate just 20% of its expanded Paramount facility to jet fuel, with the rest going toward other renewable fuels, including diesel.
He called upon those in attendance to make the case to regulators for more friendly SAF policies.
“We need advocacy really badly,” Sherbacow said.
TW illustration by Jenn Martins