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January 31, 2022
Efficiency improvements in aircraft and engine technology have historically accounted for the bulk of aircraft emission reductions, a continuing strategy supported by NASA and the Federal Aviation Administration (FAA) with academia and industry partners. There is also an increasing interest in making aircraft fuel with lower life cycle emissions, to accelerate the transition to a sustainable aviation industry. The Biden-Harris Administration and Congress are focusing on expanding the use of sustainable aviation fuel (SAF) through multi-agency coordination to reduce climate emissions from aviation [check out part 1 of this series to learn more about sustainable aviation fuels].
Read the rest of the SAF series:
SAF is a developing technology with a relatively nascent industry, making it difficult for it to compete with the institutionally-entrenched production and distribution system of conventional petroleum-based jet fuel. Lowering the price premium of SAF, generally four or five times higher than conventional jet fuel, and scaling up to widespread use by the industry are the major challenges.
On September 9, 2021, the Biden-Harris Administration unveiled the Sustainable Aviation Fuel Grand Challenge (the Grand Challenge) to boost SAF production and deployment through coordination across multiple federal agencies, fuel producers, airlines, airports, and aircraft manufacturers.
The goals of the Grand Challenge are to produce three billion gallons of SAF per year by 2030 and reduce aviation emissions 20 percent in the same timeframe. New and existing funding supporting SAF production will total $4.3 billion.
The Grand Challenge's long range target is to supply 100 percent of U.S. aviation fuel demand with sustainable fuel by 2050 to help put the industry on track for net-zero emissions.
The White House Fact Sheet describing the role of federal agencies in the administration’s SAF plan and a Memorandum of Understanding (MOU) between the Departments of Energy, Transportation, and Agriculture outline strategies to increase SAF production, including:
Department of Defense (DOD) funding, subject to appropriations, is targeted to certify four existing SAF pathways for the more rigorous standards of military use, helping to expand overall demand. To support more sustainable government employee travel, the General Services Administration (GSA) will publish a request for information about airline sustainability strategies to inform the best choices for federal travel needs.
The goal of supplying all of aviation’s fuel demand with SAF by 2050 will be more attainable if the industry is as energy efficient as possible. NASA and the FAA are collaborating to develop more efficient aircraft and engine technologies, and DOE will work with NASA to advance battery technology for electric flight. The goal is to improve aircraft performance by 30 percent and continue making air traffic management and airport operations more efficient.
Lowering aviation’s overall fuel consumption will help reduce the enormous volume of SAF needed to supply 100 percent of fuel demand by 2050. Meeting this goal will require rapid growth of supply, and legislative action could bolster this growth by providing incentives that will help accelerate the SAF industry.
There are four bills before Congress designed to encourage SAF production and use: H.R.741 and its Senate companion S.1608; and S.2263 with its House companion H.R.3440. EESI reported on the content of H.R.741 (the Sustainable Aviation Fuel Act) when it was first introduced in the 116th Congress as H.R.8769; it has been reintroduced in the current session. The Act, authored by Rep. Julia Brownley (D-Calif.), would provide directed research and grant funding for SAF supply chain development and establish an aviation-only low carbon fuel standard. The proposed standard would mandate a 20 percent less carbon-intense fuel market compared to 2005 by 2030, and a 50 percent less carbon intense market by 2050.
H.R.741 also contains a tax credit provision that is the primary initiative of S.2263 (the Sustainable Skies Act). This “blenders tax credit” would help lower the production cost of SAF by providing a credit of at least $1.50 per gallon for sustainable fuel that reduces carbon intensity by 50 percent compared to conventional fuel. The credit scales up to $2.00 ($1.75 in H.R.741) as the carbon reduction reaches 100 percent. This credit would help reduce the costs of SAF, making it more competitive with conventional jet fuel, and would level the playing field for sustainable aviation fuel competing with renewable diesel for feedstock and refinery capacity.
In his 2022 fiscal budget, President Biden proposed $6.6 billion for SAF tax incentives from 2022 to 2031. Funding to support research and development of SAF—to identify lower-cost feedstock and production processes—and stable long-term policy to incentivize investment will help the industry compete with conventional jet fuel.
The European Union’s governing body, the European Commission (EC), is considering an alternative approach to advance the SAF industry in a proposed regulation called ReFuelEU Aviation, which was introduced in July 2021. The regulation would require fuel suppliers that deliver jet fuel to EU airports to include SAF in the fuel they provide.
The EC’s SAF mandate would account for two percent of total fuel delivered in 2025, gradually increasing every five years to reach 63 percent in 2050. The regulation would require airports to create the necessary infrastructure such as storage or blending facilities, and airlines to purchase the blended SAF. The EC also decided to encourage development of the more expensive power to liquid (PtL) sustainable aviation fuel described in Part 1. The EC mandate calls for production of PtL equaling 0.7 percent of total jet fuel in 2030 increasing to 28 percent in 2050.
Outside of the policy realm, partnerships between airlines and their corporate customers are looking to reduce the climate impact of corporate travel by sharing in the higher cost of lower-carbon fuel. In the next article in this series, we will look at some of these initiatives announced in 2021, SAF purchase agreements by U.S. airlines, and production capacity.
Author: Jeff Overton
Read all of the articles in the Sustainable Aviation Fuel series
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