Corrected 2:15 p.m. | Congress and the Biden administration aim to boost the use of sustainable fuels for the emissions-heavy aviation industry, setting up a new front in the debate over biofuels.
Sustainable aviation fuels, or SAF (pronounced “SAFF”), which are made from a range of plants and other organic matter, have proved successful as a replacement or additive for traditional, petroleum-based jet fuels. The Biden administration has thrown its support behind SAF, setting a goal for the U.S. to produce enough to meet 100 percent of jet fuel demand by 2050. The administration says such a conversion would reduce greenhouse gas emissions from aviation by 50 percent.
NASA on Wednesday said it would partner with Boeing Co. to create a SAF-powered single-aisle aircraft.
Congress, in its 2022 climate, health care and tax package, included a tax credit of $1.25 per gallon for jet fuel blended with a percentage of SAF. Appropriators also included $68 million in the fiscal 2023 government spending law to support carbon reduction efforts in the aviation industry, including provisions directing federal agencies to prioritize SAF research and development.
Meanwhile, the private sector is ramping up SAF production. Companies like Finnish oil firm Neste Corp., Boston-based World Energy LLC and Sky NRG BV of the Netherlands, supply SAF to Alaska Airlines, American Airlines, JetBlue, United Airlines and Boeing. World Energy is among the top producers in the United States, with plants in California that fuel United Airlines flights out of Los Angeles.
Commercial airplanes and large business jets contribute about 10 percent of transportation emissions, a figure expected to triple by 2050 as air travel continues to grow.
That growing demand for air travel has some experts skeptical about SAF’s ability to keep pace. And although the U.S. produces 4.5 million gallons annually as of 2021, according to the White House, the industry has a long way to go to meet President Joe Biden’s goal of producing at least 3 billion gallons annually by 2030.
“The lack of sufficient supply [of SAF] is the biggest issue right now,” said Geoff Cooper, president of the Renewable Fuels Association, an ethanol industry advocate. “There’s some stuff being produced, but it’s a very small volume, and until we get more production facilities up and running, the cost is going to be high.”
In the United States, SAF costs on average $9.23 per gallon as of Wednesday, according to aviation data site Global Air, up from $8.67 in May. Standard kerosene-based jet fuel sits at an average of $6.90 per gallon.
Trucking industry representatives have raised concerns that a larger reliance on SAF will take away key feedstocks from biodiesel, an alternative fuel that’s already been used for years. Biodiesel and SAF are both made up of lipids, primarily soybean oils and used cooking oils, and critics say that scaling up SAF could undermine the biodiesel industry, which helped reduce carbon emissions by more than 18 million tons on California’s roads between 2011 and 2019.
“Touting sustainable aviation fuel as a ‘new method’ for reducing transportation carbon emissions ignores the fact that it will unravel decades of existing carbon reductions in over-the-road transportation and increase fuel prices for commercial fleets,” said the National Association of Truck Stop Operators, a trucking industry representative, in a statement. “In fact, renewable jet fuel production is simply designed to displace existing and future, less expensive renewable diesel production.”
Tax credit boost
Cooper said that the SAF industry has some positive signs. The tax credit has been a huge boon for the SAF industry, he said, and new technologies have emerged in the past year that provide new feedstocks for SAF. For example, companies like Honeywell have developed a way to further process ethanol, a popular starch-based biofuel, into jet fuel, which opens up the SAF industry to hundreds of existing bio-refineries and provides for a feedstock other than lipids.
Alder Fuels of Washington, D.C., a producer of “green crude,” is also working with Honeywell to use feedstocks like regenerative grasses and forest and agricultural residues. With a more diverse range of feedstocks, the Energy Department projects the industry would be able to produce 50 billion to 60 billion gallons per year with biomass like corn, grain, algae, agricultural and forestry residues and municipal solid waste streams.
Congress seems eager to move ahead on aviation biofuels, including some lawmakers who have been reluctant to back energy transition fuels.
Congress has long fought over what to do about biofuels, which has caused a regional split over how much biofuel, like ethanol, to blend into gasoline under the renewable fuel standard. Lawmakers from Midwestern states that produce key crops like corn and sugarcane used to make ethanol have long supported increased biofuel blends.
Legislators from states with oil refinery operations like Texas and Oklahoma have pushed back against biofuels, arguing that they will only increase fuel production costs that translate to higher prices at the pump.
In October, a bipartisan group of Midwestern lawmakers — including Sen. Joni Ernst, R-Iowa, Sen. Charles E. Grassley, R-Iowa, Sen. Deb Fischer, R-Neb., Sen. Amy Klobuchar, D-Minn., and Sen. Sherrod Brown, D-Ohio — sent a letter to the EPA calling SAF a “new pathway for RFS compliance” and urging the agency to take action on “regulatory barriers” on biointermediates, or partially converted feedstocks, that can be used to make SAF.
“Such actions would permit these biofuel producers to use at scale the investments they have made, access low-carbon markets, and pave the way for the next generation of renewable fuel innovation,” they added in the letter.
It seems that SAF’s diverse choice of feedstocks makes it more appealing to some lawmakers from both parties.
Republicans from states outside of the Midwest, including those who usually oppose green energy initiatives — like the Senate Energy and Natural Resources Committee’s top Republican, John Barrasso, R-Wyo.; Sen. Steve Daines, R-Mont.; and Sen. Bill Cassidy, R-La. — have come to support SAF and biodiesel production. All have biodiesel production plants located in their states.
Montana-based oil refiner Calumet Montana Refining announced its renewable arm, Montana Renewables, had recently received bonds to add biodiesel production infrastructure to its refinery. Louisiana is also set to get new renewable diesel plants, including one from project development company Strategic Biofuels LLC, and Barrasso said Wyoming is “a leading producer of renewable diesel and is expected to produce a lot more in the near future.”
The Republican group, along with Sens. Dianne Feinstein, D-Calif., and Ben Ray Luján, D-N.M., introduced a bill in the last Congress that would allow renewable and sustainable aviation fuels to qualify for the Energy Department’s Title XVII loan guarantees under the Energy Policy Act of 2005.
“We’re seeing a fair amount of attention around SAF in New York, the Northeast, and even down the coast into Georgia and Florida,” Cooper said. “We haven’t seen that sort of geographical division behind SAF that we’ve seen with other biofuels, and I think part of the reason for that is … there is broader agreement on the need for solutions in the aviation sector, and there’s broad agreement that liquid biofuels are probably the best bet.”
And as long as SAF continues to show promises to grow industries across the country, it’s likely that Republicans will remain supportive of aviation biofuels.
“During the conversations regarding the tax credit, we didn’t get a lot of pushback from really anybody,” a House Transportation and Infrastructure Committee aide familiar with the discussions said. “Many Republicans have conceptually endorsed the idea of SAF and ways to reduce barriers … the [aviation] industry pushed for it, labor organizations pushed for it, and as long as strong environmental standards are in place, environmentalists are behind it too.”
The aide added that Democrats on the committee will likely look into building on SAF progress made throughout the last few years, including ways to ramp up SAF storage and transportation infrastructure.
This report was corrected to accurately reflect the names of two companies involved in producing sustainable aviation fuels, Neste Corp. and Sky NRG, to clarify the products of Alder Fuels, and to properly identify Sen. Joni Ernst of Iowa.