Around the world, there is a strong push to put aviation on a more sustainable footing and reduce the industry’s greenhouse gas (GHG) footprint. Increasing production of sustainable aviation fuel (SAF)—a close cousin of renewable diesel (RD)—is key to this effort. But while the economic case for producing RD in the US has long been compelling thanks to government subsidies, the returns on investment for producing SAF look more dubious, despite an apparently generous tax credit for SAF in the Act inflation reduction (IRA). . As we discuss in today’s RBN blog, the incentive to make jet fuel is probably too small—and too short-lived—to overcome the higher production cost of SAF compared to RD, and it is possible that additional incentives are needed to stimulate significant increases in SAF. production
Jet fuel is the third most consumed transport fuel on the planet, with a total of around 7 Mb/da worldwide. Although global jet fuel consumption is significantly lower than diesel (28 Mb/d) and gasoline (24 Mb/d), it represents a respectable 12% of these “Big Three” net transportation fuels. In the US, jet fuel accounts for a similar share. Therefore, its considerable volume presents a valid target for carbon reduction. Many airlines have set “net zero by 2050” targets and (many would argue) increased use of SAF would have more of a climate impact than carbon offsets. So when combined with the environmental goals of consumer airlines, there seems to be a case for SAF. But is it economical to produce?
As we said a Sail away, SAF and RD not only provide renewable, low-carbon alternatives to jet fuel and petroleum-based diesel, respectively, but are also the chemical twins of these widely used fuels and thus can serve as “output” substitutes for them. . In addition, SAF and RD (like traditional diesel and diesel) have similar, but not identical, chemical compositions, with SAF specifications (like jet fuel) reflecting the special needs of jet engines and aircraft in reaction (such as very low freezing). point).
