The sky is no longer the limit for ethanol. From the world’s top airlines to the highest-GDP countries, the race to get more sustainable aviation fuel (SAF) is in the air—and ethanol is on board.
Before understanding the technologies, big-name partnerships and generational volume demand projections related to SAF, it’s important to understand how we got here, by both government push and private sector pull.
Although SAF was making headlines well before the landmark U.S. Inflation Reduction Act was signed into law this past August, the bill provided immediate amplification to the biobased jet fuel movement. The IRA includes several provisions that incentive the use or production of SAF, including a two-year tax credit for blenders, a three-year tax credit for producers, and a grant program worth $290 million over four years to carry out projects that produce, transport, blend/store, develop, demonstrate or apply low-emission aviation technologies. To be eligible, the SAF must achieve at least a 50 percent improvement in GHG emissions performance on a lifecycle basis as compared with conventional jet fuel, according to the bill. And the tax credit—which starts at $1.25 per gallon of SAF—increases with every percentage point of improvement in lifecycle emissions performance, up to $1.75 a gallon.
In mid-2021, the European Union passed its own version of the IRA, including robust SAF incentives and firm targets. Through the EU’s “Fit for 55” package, the share of sustainable fuels at EU airports will increase from a minimum of 2 percent in 2025 to at least 63 percent by 2050.
Back in the U.S., just a few months after the passage of Fit for 55, the U.S. Department of Energy rolled out its SAF Grand Challenge to meet 100 percent of U.S. aviation fuel demand with sustainable, low-carbon fuel—also by 2050.
The Grand Challenge is a U.S. government-wide approach to make and use more SAF. The immediate goal is to domestically produce 3 billion gallons of SAF by 2030. The DOE’s long-term goal is to produce 35 billion gallons of SAF by 2050, or essentially all the jet fuel used domestically.
Despite what seem to be lofty goals, the DOE believes the U.S. has everything it needs to begin ramping up SAF now to achieve its vision. The Billion-Ton Report provided by the U.S. Department of Agriculture shows that 1 billion dry tons per year of biomass can be grown or collected sustainably in the country. That amount of biomass can be converted into roughly 50 to 60 billion gallons of advanced biofuel (in this case, lots of SAF) without impacting agriculture, trade or current uses of biomass. Furthermore, the DOE believes that as ground transport electrifies, SAF presents a potential market for existing biofuels including ethanol.
In September, when the U.S. DOE released an updated roadmap for the SAF Grand Challenge, DOE Secretary Jennifer Granholm said that not only is the initiative critical to decarbonizing the airline industry and reaching U.S. climate goals, but helping “American companies corner the market on a valuable emerging industry.”
Off-Take Agreements Find Lift
SAF news from the aviation front shows airlines of all sizes and types are well past just considering their involvement with SAF. The headlines are no longer about airlines studying the potential of biobased fuel. They’re about offtake deals being signed now.
The International Civil Aviation Organization, a leading aviation group recognized across the world, has started tracking and publishing the rise of SAF offtake agreements on its website. The numbers explain it all. In 2013, ICAO showed there was only one offtake agreement by a major airline with an SAF provider. In 2016, the agreement trends show a discernible spike, reaching six agreements. But then in 2021 and 2022, offtake agreement signings for SAF have been nothing but wheels up. Last year, there were 23 offtake agreements announced. This year, there have already been 30.
United Airlines (6) and Delta (7) have led the way among major airlines signing offtakes in 2022. For producers of SAF, Gevo Inc. (10), Neste (12) and World Energy (10) are all in the double-digit range for offtake agreements, with Aemetis (9) also right there. In total, ICAO currently says there are 80 offtake agreements for SAF in place.
What Airlines Think About SAF
The International Air Transport Association is a trade association for the world’s airlines. With 290 airlines represented, the IATA member list accounts for 83 percent of total air traffic. “We support many areas of aviation activity and help formulate industry policy on critical aviation issues,” Sebastian Mikosz, senior vice president for environment and sustainability, tells Ethanol Producer Magazine.
About a year ago, IATA released its Net Zero commitment, a goal of its members to reach net-zero carbon emissions by 2050, through four different decarbonization pathways. “We know that achieving net-zero carbon emissions from aviation by 2050 will be extremely difficult,” Mikosz says.
According to Mikosz and his team, however, there is a plan. The scale of the aviation industry in 2050 will require the mitigation of 1.8 gigatons of carbon. IATA knows that. The association believes that roughly 65 percent of that carbon will be abated through sustainable aviation fuels. Hydrogen-based new propulsion technology may account for another 13 percent; efficiency improvements will help at 3 percent; and the remaining 19 percent will be handled through carbon capture and storage (11 percent) and/or offsets (8 percent).
“The actual split, and the trajectory to get there, will depend on what solutions are the most cost-effective at any particular time,” IATA’s Net Zero plan states. “Whatever the ultimate path to net zero will be, it is absolutely true that the only way to get there will be the value chain and governments playing their role.”
IATA knows it plays an important role in achieving 65 percent of its net-zero commitment through the use of SAF. Mikosz explains that the association understands that the market needs to get a clear signal from its members about SAF. “We take it seriously, and we intend to deliver on it.”
“We need policymakers and SAF producers to keep producing more SAF to make it available to airlines,” he says. Every single drop of SAF produced last year was used by airlines around the world, and it will be no different this year, according to IATA.
“In our analyses,” Mikosz says, “we determined that scaling up production and availability of SAF is key to decarbonizing a notoriously hard-to-abate sector. Scenarios vary, but one thing is clear: SAF will represent the biggest share of the solution ... We expect to rely on SAF so strongly because at this time, it is the only reliable avenue to decarbonize the sector without disrupting the air connectivity that drives the global economy.”
IATA is also stressing that SAF isn’t a new or novel product. “SAF has been in use for several years, with more than 450,000 flights powered by a combination of SAF and conventional fuel already having occurred.”
The association also believes that by 2025, the number of SAF producing facilities will jump dramatically in the next eight years. Although IATA describes the number of operating facilities involved with SAF this year as a “handful,” there will be nearly 100 by 2025. By 2030, there will be several hundred. Volumes of SAF produced and used by 2030 could reach at least 7.4 billion gallons.
Time to Produce
Even with 30 offtake agreements signed this year, airlines and current or future SAF producers alike will not be able to keep pace with demand in the near term. That doesn’t mean both aren’t trying. SAFFiRE Renewables LLC, a company formed by D3MAX LLC, as part of a DOE-backed project to develop and produce scalable, sustainable aviation fuel, is in the early stages of commercializing its SAF production platform. The company announced a joint venture with Southwest Airlines earlier this year and is pursuing a proven, potentially game-changing production method capable of utilizing corn stover-based ethanol as a feedstock for SAF.
Mark Yancey, CEO of SAFFiRE, believes the market for SAF by 2050 will be in the 10 billion gallons per year range, if not more. And his optimism in the quickly emerging SAF space is not singular. Gevo Inc., Aemetis, World Fuels, Neste and others have publicly stated that the volume potential for SAF in the years ahead is massive—in the billions of gallons per year range.
LanzaJet, an emerging superstar in the SAF sector, has transformed its work with technology from the DOE’s Pacific Northwest National Laboratory that was started years ago, into offtake agreements or investments spanning the world. Since 2020, LanzaJet has announced projects totaling 300 million gallons of SAF in the U.S., U.K., Sweden, Central Europe, Canada and Japan.
Highly motivating alcohol-to-jet news in the SAF space also came from Honeywell in late 2022. In October, the company announced a new, innovative ethanol-to-jet fuel processing technology allowing producers to convert corn-based, cellulosic or sugar-based ethanol into SAF.
“Ethanol offers producers a widely available, economically viable feedstock,” the global technology entity said. “Honeywell’s ready-now technology uses high-performance catalysts and heat management capabilities to maximize production efficiency resulting in a cost-effective, lower carbon intensity aviation fuel.”
Barry Glickman, vice president and general manager of Honeywell Sustainable Technology Solutions, says the new ethanol-to-jet fuel process can be used as a standalone platform or be coupled with carbon capture technology.
The SAF tech plants can be modularized off site, enabling lower installed costs and faster, less labor-intensive installation compared to job site construction. The technology can give producers SAF capacity up to a year faster than what is possible with traditional construction approaches, Honeywell says. In addition, Honeywell believes petroleum refiners and transportation fuel producers can convert current or idle facilities into SAF production plants, “to meet growing market demand.”
For corn-based ethanol producers, SAFFiRE and Honeywell clearly have options for entering and thriving in the exploding SAF market. For producers eyeing alternative feedstocks, there are also several opportunities—from tech to investors. The airstrip needed to give lift to alcohol-based aviation fuel has been cleared, according to multiple aviation associations. Tech providers are here and proven. Airlines are in. Government entities and policymakers have made their position in favor of SAF clear. So, for SAF production this year and decades into the future, the flight towards a new era of multi-billion-gallon per year volumes is no longer just taxiing toward the runway—it's already taken off.
Printed in the December 2022 issue of Ethanol Producer Magazine