A new market report by SkyNRG, the Amsterdam-based global provider of sustainable aviation fuels, predicts that both the US and Europe will fall short of their 2030 SAF targets unless production capacity is increased and fuel feedstock sources are expanded, and estimates the need for more than 450 new facilities to meet the 2050 goals of both markets. The report says current US announcements of SAF production rely predominantly on the availability of fats, oils and greases (FOGs), and corn ethanol, “with an optimistic perspective on the availability of FOGs”. It believes a lack of production incentives will limit use of alternative Power-to-Liquids (PtL) SAF in the US “despite its vast potential”. In Europe, it estimates there will be sufficient SAF to meet demand until 2027, as long as currently announced production capacity is delivered and some renewable diesel facilities also produce SAF. But it expects SAF supply in Europe and the UK will not be sufficient to meet mandated volumes by 2030 without more production capacity or imports, reports Tony Harrington.
In July last year, SkyNRG released its first market outlook report after the European Commission announced the ReFuelEU Aviation initiative to drive increased use of SAFs. In its latest report released this month, SkyNRG has provided updated projections following the US government’s introduction of its SAF ‘Grand Challenge’ to help drive up production of the fuels and a proposal by the UK government to introduce a SAF blending mandate.
“For the United States, SkyNRG concludes that meeting the 3 billion-gallon (8.6 Mt) SAF target by 2030 is conditional upon rapid feedstock and technology diversification,” finds the latest report, which warns that access to sufficient fats, oils and greases for SAF production would be limited by competing demands for renewable diesel production.
It adds: “SkyNRG expects that with current policies, a significant share of the 2030 production target would be filled with SAF from corn ethanol. The remainder would have to be filled by SAF from wastes and residues converted via the Alcohol-to-Jet and Gasification plus Fischer-Tropsch (AtJ/G+FT) pathways. Power-to-Liquids SAF is not expected to play a significant near-term role in meeting US SAF supply due to absent incentives, despite its vast potential.”
Production in the US is expected to be driven by three policy mechanisms that together could, says SkyNRG, significantly reduce the cost of SAF for the aviation industry: the Renewable Fuel Standard, the California and Oregon Low-Carbon Fuel Standards and the proposed federal SAF blenders tax credit.
The report also concludes that achieving 2050 targets for 100% SAF will be “extremely challenging”, even with stable demand for pre-Covid levels of jet fuel. “To meet the 100% SAF goal, the US will need to double down on valorising cellulosic waste feedstocks, develop novel sustainable biomass supply chains and accelerate green hydrogen deployment for Power-to-Liquids,” says SkyNRG. “Using conservative assumptions, we expect the US can develop around 250-plus SAF facilities by 2050, which could yield roughly 50 Mt (18 billion gallons) SAF, falling short of the required 75 Mt (27 billion gallons) under constant jet fuel demand.” The estimated number of SAF facilities was based on an average plant size of 200,000 metric tonnes, averaged across multiple technology pathways.
SkyNRG said that at the time its latest report was produced, an analysis of all renewable fuel projects announced in the US showed approximately 0.9 billion gallons (2.5 Mt) of SAF capacity was expected to be operating by 2030. “This means that the US is about 2.1 billion gallons (6 Mt) short of meeting the 2030 production goal.” Because the SAF Grand Challenge is a production target, imports of SAF were not considered in the SkyNRG analysis.
In Europe, the short-term assessment by SkyNRG is more positive. “We conclude that up to 2027, supply can match demand, provided that currently-announced production capacity materialises and some renewable diesel facilities will make additional investments to produce SAF,” says the report. “Until 2030, European supply is 2 Mt short of meeting projected mandate demand. More announcements are needed, and/or imports of SAF will have to be considered to meet expected mandates in the EU and UK.”
However, adds SkyNRG: “Based on announced projects worldwide, we expect that potentially 2 Mt of SAF could find its way to the European market, meaning additional European capacity would not be needed to meet mandated volumes in 2030.”
That position would change if Europe opted to prioritise energy independence, which SkyNRG said would require European renewable diesel plants to produce SAF, or fresh commitments to produce fuel from cellulosic waste or renewable power inputs.“ Long term, Europe will have to develop 200-plus SAF facilities to meet a demand of 40 Mt by 2050 under constant jet fuel volumes. Most of these facilities would be based on AtJ/G+FT and Power-to-Liquid technology.”
SkyNRG said that based on discussions with aviation stakeholders in the UK, a blending mandate of 2.5% (0.3 Mt) is most likely to be introduced in 2025, rising to 10% (1.2 Mt) by 2030, 31% (3.9 Mt) by 2040 and 75% (9.3 Mt) by 2050. “To meet the aggregate demand from EU and UK mandates, and the additional demand expected from national mandates, a SAF supply of 4.7 Mt in 2030 and 39.1 Mt in 2050 is needed.”