U.S. Department of Energy Releases New Report on Pathways to Commercial Liftoff for Sustainable Aviation Fuel

November 14, 2024

Print This Article Share it With Friends

(U.S. Department of Energy) New Report Identifies Key Strategies to Increase Production and Position the United States to Lead the Global SAF Economy by 2030 -- The U.S. Department of Energy (DOE) today announced the release of its latest Pathways to Commercial Liftoff report, which underscores the near-term potential for sustainable aviation fuel (SAF) to meaningfully decarbonize the aviation sector. “Pathways to Commercial Liftoff: Sustainable Aviation Fuel” analyzes the technical and commercial readiness of several SAF production pathways and highlights 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.

“With the aviation sector growing each year, there is no better time to invest in solutions that are both technologically and commercially ready today,” said U.S Secretary of Energy Jennifer M. 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’s Pathways to Commercial Liftoff report provides a shared foundation of insights and analysis to guide public and private sector efforts in scaling transformative technologies and accelerate the nation’s clean energy transition. The Liftoff series fosters alignment on market challenges, investment needs, and critical pathways for deploying sustainable solutions, such as SAF, at scale.

Key findings from the report include: 

Announced projects represent over three billion gallons of annual domestic SAF production capacity by 2030, surpassing the U.S. SAF Grand Challenge target. This announced capacity correlates to over 10% of projected U.S. jet fuel demand, over $44 billion of investment, and over 70,000 jobs across the SAF value chain through 2030.
SAF liftoff by 2030 will require accelerated deployment of production technologies and feedstocks that are readily available today. In parallel, investments in emerging SAF technologies (e.g., next-generation feedstocks, innovative SAF conversion technologies, etc.) are essential to ensure that 100% of jet fuel can be sustainable by 2050.
The biggest barrier to SAF’s scale up is cost. SAF currently costs two to ten times more than fossil jet fuel, depending on the feedstock and conversion technology used to produce it. Federal and state incentives play a necessary role in helping make SAF more cost competitive with fossil jet. However, 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. 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.
SAF liftoff will require international policy coordination, including alignment on carbon accounting, feedstock traceability, and book and claim systems.

The SAF Liftoff report complements two conditional commitments announced by DOE’s Loan Programs Office (LPO) in October 2024 to scale domestic SAF production. LPO’s $1.44 billion loan guarantee to Montana Renewables, LLC, if finalized, 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. LPO’s $1.46 billion loan guarantee to Gevo Net-Zero 1, LLC will 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 U.S.-grown, low-cost, low-carbon field corn and will use carbon capture and sequestration and renewable power to lower emissions.

DOE develops its Pathways to Commercial Liftoff reports with extensive stakeholder engagement and system modeling. DOE continues to solicit input through industry forums, requests for information, and regular interaction in the context of our authorities; direct public input can be submitted via email to liftoff@hq.doe.gov. Additional reports will be added in the coming months. Find out more information about the reports here.

On November 21, 2024, DOE will host a webinar featuring senior DOE leaders to explore the “Pathways to Commercial Liftoff: Sustainable Aviation Fuel.”  Please register  here. READ MORE

Table of Contents

Comments.........................................................................................................................................................iii

Authors .............................................................................................................................................................iii Acknowledgements.........................................................................................................................................iii Context...............................................................................................................................................................1

Executive Summary..........................................................................................................................................2

Scale Supply........................................................................................................................................................3

Increase Certainty of Long-Term Demand........................................................................................................4

Shore Up Supportive Policy ..............................................................................................................................4

Chapter 1: Overview and Value Proposition.................................................................................................6

SAF in Context ..................................................................................................................................................6

What is SAF? ....................................................................................................................................................8

SAF’s Value Proposition ......................................................................................................................................9

SAF Grand Challenge & Liftoff .............................................................................................................................. 11

Chapter 2: Current State of Technologies and Markets ............................................................................ 13

SAF Production Capacity..........................................................................................................................................13

SAF Costs .................................................................................................................................................................14

U.S. SAF Policy ..........................................................................................................................................................20

SAF Blending, Transport and Storage .........................................................................................................................24

SAF Investment............................................................................................................................................................24

Chapter 3: Pathway to Liftoff........................................................................................................................25

Defining Liftoff................................................................................................................................................................25

Scaling Supply.................................................................................................................................................................26

Increasing Certainty of Long-Term demand ....................................................................................................................33

Shoring Up Supportive Policy .....................................................................................................................36

Chapter 4: Action Items for the Industry ....................................................................................................42

1. Focus on the most technologically-ready pathways for near-term deployment.......................................42

2. Pursue alternative offtake agreements. ...................................................................................................43

3. Expand supply-side policies........................................................................................................................................................44

4. Standardize the calculations associated with SAF’s environmental attributes. ........................................44

5. Bolster upstream supply chains................................................................................................................44

6. Support permitting and usage regulation. ...................................................................................................45

7. Develop demand-side incentives to ensure long-term offtake.......................................................................45

8. Continue to support R&D for nascent and lower-CI pathways to diversify production pathways. ..............45

Chapter 5: Metrics to Track Progress...........................................................................................................46

Conclusions .....................................................................................................................................................47

Appendix 1: Key Terms and Abbreviations .................................................................................................48

Appendix 2: Supportive SAF Policies ..........................................................................................................49

Appendix 3: RIN Categories and Values Over Time...................................................................................54

Appendix 4: Impact of Federal and State Incentives on SAF Production Costs.....................................55

Appendix 5: Applied Adoption Readiness Levels ......................................................................................60

References ....................................................................................................................................................... 61

...

KEY TAKEAWAYS

Liftoff will require a near-term focus on the deployment of technologically ready pathways, but these bio-feedstock pathways will require significant investment in upstream supply chains.
Investors should invest now in more technologically and commercially nascent pathways that may have fewer feedstock restrictions and lower CI scores over time.
Liftoff will also require that airlines pursue innovative offtake agreements that can provide greater demand certainty.
These agreements can include strategic investments into the SAF production chain to secure preferred pricing, or the activation of third parties looking to acquire SAF’s environmental attributes.
These agreements will require a reconfiguration of SAF’s value, shifting from a per-gallon to a per-metric ton of CO2 abated basis and including book and claim allowances in standards bodies like the Greenhouse Gas Protocol (GHG Protocol) and the Science Based Targets Initiative (SBTi).
Even with these demand drivers, achieving SAF liftoff may require additional policy support.

...

Today, the cost of DAC (direct air (carbon) capture) ranges from $600-$1,000 per metric ton of CO2 e abated. Even without policy support, HEFA and AtJ at 50% and 80% emissions reduction are in the same range or cheaper than the cost of DAC, with a range of $385-$1,018 per metric ton of CO2 e abated. When supported by federal and state incentives, these pathways are all significantly cheaper than DAC per cost of metric ton of CO2 e abated, with a range of $83-510 per metric ton of CO2 e abated.xxiii Additionally, the PtL pathway at 80% abatement becomes comparable to DAC in abatement cost. The fact that HEFA and AtJ pathways can be as cheap or cheaper than DAC on an emissions abatement cost level proves the importance of SAF for decarbonizing the aviation sector. When developing decarbonization strategies for corporate travel emissions, third-party offtakers could have cost savings if they purchase SAF credits in place of DAC credits under today’s policies.

READ MORE

Related articles