One of the biggest hurdles to wider adoption of sustainable aviation fuel (SAF) is price competitiveness compared to traditional jet fuel. There simply isn’t enough SAF being produced to supply the more than 100 billion gallons of jet fuel demand generated by the global aviation industry every year. Ethanol producers believe SAF from corn-based ethanol is the best practical solution to quickly boosting supply but a battle over subsidies is hampering their efforts.
In the US, the Biden administration has set a goal to supply at least 3 billion gallons of SAF per year by 2030 as part of its broader effort to decarbonize the transport sector. Production last year was just under 16 million gallons, or less than 0.1% of total jet fuel consumed by US airlines and a sliver of the roughly 24.7 billion gallons of petroleum-based jet fuel now produced in the US annually. The meager production is the result of both underinvestment in SAF and a lack of feedstock supplies.
Currently, SAF is produced mainly from bio-based feedstocks, most commonly waste oils including used cooking oil and animal fats, as well as oilseeds like soybeans, all of which have limited availability. In the case of waste oils, the logistically challenging collection process can also greatly add to costs. But SAF can also be made from ethanol, a well-established industry with a global infrastructure network already in place. What’s more, ethanol offers producers a widely available, economically viable feedstock.
That investment side of the equation has dramatically changed thanks in part to commitments by the airline industry as well as increased government incentives. However, those incentives in the US are at issue right now, specifically whether SAF from corn-based ethanol qualifies for subsidies under the Biden Administration’s Inflation Reduction Act (IRA).
Under the IRA, SAF must yield a 50% reduction in lifecycle emissions compared with petroleum-based jet fuel before it can qualify for a $1.25 tax credit. Each additional percentage in carbon reduction earns the producer another cent a gallon, up to $1.75. Lifecycle emission reductions can vary depending on the feedstock as well as the methodology used to calculate the results.
Environmentalists prefer a European methodology known as “CORSIA” run by the International Civil Aviation Organization (ICAO) to calculate emissions per gallon, arguing that the methodology best assesses land use changes that they say can spike greenhouse gas emissions on farms.
Ethanol producers are asking the administration to use the US GREET model, which is run by the Department of Energy’s Argonne National Laboratory. They argue GREET is more accurate than ICAO and does not overly penalize farmers for using land to cultivate crops. Additionally, the biofuels lobby says the Biden administration cannot meet its targets if it blocks ethanol as an SAF feedstock and would hurt farmers in the meantime.
The Inflation Reduction Act calls on the Treasury department to authorize the ICAO tool, along with “any similar methodology” that meets Clean Air Act requirements. That could potentially include GREET but officials at the Environmental Protection Agency and agriculture and energy departments are reportedly divided over which model to use. A decision is expected in September.
Several ethanol-to-jet fuel projects are already in the works, including LanzaJet’s Georgia-based facility due to be completed in 2023. The project would produce 10 million gallons of SAF and renewable diesel per year. Another project comes from Omaha-based ethanol producer Green Plains Inc. which has a joint venture with United Airlines and Tallgrass Energy Partners to develop and commercialize ethanol-based SAF. The joint venture, called Blue Blade Energy, would produce up to 135 million gallons of jet fuel annually.
The largest project announced so far is a 250 million gallon facility planned by Honeywell and Summit Agricultural Group. Iowa-based Summit has the largest corn-based ethanol plant in Brazil and is planning to use biofuel from that facility to feed the US SAF factory, along with supplies from US Midwest plants that have signed on to its carbon pipeline project. (Sources: Platts, Ethanol Producer, Farm Bureau, E&E)
