The Biden administration's proposed target to cut US aviation emissions by 20% by spurring the production of 3 billion gal/year of sustainable aviation fuels by 2030 is achievable, if done at the expense of other fuels like renewable diesel, according to S&P Global Platts Analytics.

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Corey Lavinsky, global manager of biofuels analytics at Platts, said market dynamics could spur rapid expansion of SAF if incentives shifted away from renewable diesel. A $1/gal tax credit for blending renewable diesel expires at the end of 2022.

"If SAF gets a more favorable blending credit, or if the renewable diesel blending credit is allowed to expire, or both, SAF production can be off to the races," Lavinsky said Sept. 9.

The Biden administration Sept. 9 proposed a $1.50-$2/gal SAF blender's tax credit as part of a broader package of executive actions to clean up emissions from air travel, which is considered one of the hardest-to-decarbonize sectors. The tax credit would require at least a 50% reduction in lifecycle greenhouse gas emissions, with greater reductions receiving a bigger tax incentive.

The proposal set a 2050 target of meeting all US aviation fuel demand by SAF -- an estimated 35 billion gal/year by 2050.

Platts assessed US West Coast sustainable aviation fuel with credits at $7.44789/gal on Sept. 9, and without credits at $2.52841/gal.

Climate action plan

Other policies in the Biden administration's proposal include:

$4.3 billion in new and ongoing funding to support SAF projects and fuel producers;
an increase in research and development to demonstrate technologies that can achieve at least 30% improvements in aircraft fuel efficiency; and
efforts to improve air traffic and airport efficiency to cut fuel use.

The White House said it would also release an "aviation climate action plan" in the coming months to set a comprehensive plan for reducing aviation emissions.

All non-military flights within and departing from the US represent 11% of the country's transportation-related greenhouse gas emissions, the White House said.

Catalyzing new markets

LanzaJet CEO and Board Director Jimmy Samartzis said Sept. 9 at the S&P Global Platts Renewable Diesel Virtual Conference that the SAF-specific blender's tax credit had broad support in the US Congress

"This tax credit can motivate and incentivize the additional scale up and production of SAF throughout the country, whereas a lot of the SAF that is being produced today is being uplifted in California, in particular, because of the low carbon fuel standard," Samartzis said after attending a White House event unveiling the aviation plan.

About 30 million gallons of SAF was produced and consumed globally in the past year, compared with more than 90 billion gallons of fossil-based jet fuel, Samartzis said. That amounts to one gallon of SAF for every 3,000 gallons of traditional jet fuel.

LanzaJet aims to produce 1 billion gal/year of SAF by 2030 from ethanol derived from waste sources by alcohol-to-jet processing.

Samartzis said SAF represents the most viable near- and medium-term solution for reducing the aviation sector's CO2 profile, although it is still in its early years of scale up and production.

"All in all, as you can see from what's happening here in the US, what's happening in the European Union and the UK and elsewhere, a lot of the key ingredients are falling into place and truly catalyzing a new global marketplace for renewable fuel," he said.

Ethanol makers want in

Samartzis noted that the sustainable fuel industry is at an inflection point. Technology is scaling; capital is becoming increasingly available; governments are putting in place appropriate programs and policies to spur development; customers and corporations are motivated to address climate change; and airlines are becoming more interested and aggressive in reducing their carbon emissions.

Renewable Fuels Association President and CEO Geoff Cooper, who also attended the White House event, said SAF represents a major new market for ethanol producers.

"Ethanol has a decades-long proven track record for reducing greenhouse gas emissions from motor vehicles, and we are confident that ethanol will play a central role in cleaning up aviation fuels as well," Cooper said in a statement. "With the right policy signals and support, ethanol-to-jet technologies can quickly scale up to meet the future SAF needs of the aviation sector."