Reasons for Global Disbursement of SAF Production

Among the reasons for global disbursement of SAF production is that the seven different existing chemical conversion pathways which create the different hydrocarbon-compound components that go into SAF blends and 100% SAF allow many different forms of organic material to serve as the raw ingredients for the refining process.

Algae, weeds, fungi, agricultural and timber-industry waste of many kinds, and even commercially used cooking oils and fats can all be used as feedstocks. Not all of these will be found in one location, and some will be only found in one or a few places.

A directly related issue is that SAF production will be most efficient where it can make use of plentiful electrical power generated locally. For instance, the province of Québec could make a strong case to have one or more SAF-refining facilities located there, P&WC’s Albert says. This is because it has huge supplies of hydroelectrically generated power available and boasts sizable production of corn and other agricultural products whose waste could easily serve as SAF feedstock materials.

Coupled with the fact that SAF has a long way to go before its production costs will become as low as those for conventional jet fuels (the current industry rule-of-thumb is that SAF costs four times as much to make as Jet A), there may be compelling reasons to locate SAF refineries close to where its organic feedstock material is located, IBAC’s Edwards suggests.

Extensive supplies of locally available power-generation capacity would make the production-siting decision even more compelling. Plentiful availability of electrical energy generated by any of a welter of different renewable-energy sources – wind farms, geothermal facilities, wave and tidal power installations, solar-energy farms, and waste- combustion generation – is seen as a basic requirement for SAF production in helping it meet its generally-accepted target of reducing the life-cycle carbon emissions of jet fuel by 80%.

The sources of these different forms of renewable-energy generation won’t all be found in today’s existing oil-and-gas-producing nation – but they can be found plentifully in many other developing nations and regions such as African countries, nations ringing the Indian Ocean and other nations in Central and Eastern Asia.

Coupling investment in alternative-source facilities generating electrical power with direct investment in SAF production facilities would be the most obvious way of helping reduce the production costs associated with the type of SAF in question. Therefore, an important task for Business Aviation’s politically and financial influential users is to use their influence to try to ensure that this coupling of investments take place.

However, locating SAF production sites as close as possible to the renewable energy-generating plants providing the electrical power required implies that the infrastructure required to transport the SAF to its delivery points might be more extensive and expensive to manufacture and install than if it were serving a traditional production facility refining jet fuel from fossil-fuel oil.

Accordingly, banks would also potentially need to be willing to fund larger-scale investments in fuel-delivery infrastructure than those they were used to making traditionally.

The Need to Engage Financiers

Edwards says IBAC and its member organizations are well aware they must engage the financial community in discussions highlighting the need for directed and varied investments not only in SAF production facilities, but also in the alternative-power facilities generating electricity from renewable-energy sources – wherever they may be located in the world – and also in SAF delivery and storage infrastructure.

“We’ve been mainly focused on [highlighting the need for SAF development] with our operator community so far,” says Edwards. “But we should be engaging more the financiers and beginning that discussion, working closely with our financial and production colleagues.

“To the degree that Business Aviation has links with the financial world, we shall be speaking to them,” Edwards promises. “Together with ATAG, we are having meetings with governments and encouraging the financial community to be more involved in this area.” An important thrust of IBAC’s joint effort with ATAG is “to encourage governments to put policies in place to allow SAF to come to their countries”.

At the multinational level, IBAC is also involved in the ICAO Assembly’s overall effort to identify sources of funding for the development of SAF production, and to work with the national governments of ICAO’s member States to encourage them to incentivize construction of SAF facilities, Edwards adds.

He says one idea is to have ICAO establish an informational clearing house together with its member nations which would help match interested financiers with suitable SAF-related investment projects.

Fortunately, there’s no reason to think that, because SAF costs much more to make today than conventional jet fuel, future large-scale investments in SAF won’t be made.

There’s substantial evidence to suggest that because of the general industrial goodwill for, and government legislative support of SAF, created by means of financial incentives in North America but more likely by taxation actions in Europe, according to Edwards – SAF production investment might well be substantially forthcoming.

In fact, in at least one case, such funding already has been forthcoming in sizable amounts and will continue to be made, according to Larry Schafer, an executive with Washington D.C.-based Playmaker Strategies, a governmental affairs firm which numbers among its clients World Energy, a fuel refiner that boasts it became the world’s first manufacturer of SAF in 2016, and remains North America’s only SAF refiner.

Schafer says World Energy, which today is delivering 6 million gallons of SAF annually, has just completed a $500m extension of its refinery in Los Angeles to develop its production of SAF. By the end of 2024 the company expects to begin investing $250m annually to build a new renewable-fuels facility in Houston, which will also refine SAF.