Takeoff: Rising capacity for Sustainable Aviation Fuel (SAF)

Demand for Sustainable Aviation Fuel (SAF) is expected to surge over the next decade, particularly in the EU and US, driven by mandates and incentives aimed at decarbonizing aviation. Our review of capacity expansion projects highlights the growing need for suitable raw materials – including woody biomass.

Aviation is responsible for 1.5% of global GHG emissions (2022) and 4.0% of global warming. Its emissions have an outsized impact due to the additional effects of nitrogen oxides and contrail clouds, short-lived cirrus clouds that form from the water vapour in aircraft emissions and exacerbate warming alongside carbon dioxide.

SAF utilization can potentially reduce aviation’s climate impact by 30-60%, thanks to its biogenic (closed-loop) CO2, lower NOx emissions, and reduced contrail cloud formation. While other technologies like hydrogen fuel cells, hydrogen turbines, and battery-electric systems also hold promise for decarbonizing aviation, none of these can be deployed as quickly as SAF. It is a drop-in fuel that can be used in the same aircraft turbines and delivered using existing airport refuelling infrastructure.

Governments worldwide are enacting legislation to boost SAF usage. In the EU, the European Commission aims for a SAF blending mandate of 6% by 2030 (~8 billion liters of SAF), while in the US, the Department of Energy (DoE), Department of Transportation (DOT), and Department of Agriculture (USDA) target 3 billion gallons (11 billion liters) of SAF use through the SAF “Grand Challenge.” Airlines are also actively transitioning to meet consumer and regulatory demands.

We forecast demand for SAF to grow from under 2 billion liters in 2024 to over 20 billion liters by 2030, based on air travel projections, aircraft fuel efficiency advancements, and SAF’s share of fuel consumption. Forecasts from other organizations suggest 2030 demand could range from 25 to 40 billion liters.            

Meeting this demand requires substantial investment in SAF production facilities and the development of supply chains for raw materials like vegetable oils, woody biomass, and renewable electricity. OKelly Acumen maintains a database of global SAF facilities, both operational and planned – click here for more information. The latest update of this database reveals a large increase in investment in SAF capacity. The theoretical capacity operational or recently constructed plants is 10.4 billion liters in 2024, up from 6.1 billion liters in 2023 (Figure 1).

Figure 1: Capacity expansion plans for SAF, by project status

However, actual production is probably well below this level. Many plants are still ramping up production towards nameplate capacity. Most operating plants produce a mix of SAF and other biofuels, including biodiesel and naphtha, and can shift the mix of production to fit customer orders. Low capacity utilisation is typical of new and rapidly growing industries, where technology is under development, and operational issues in manufacturing and supply chains need to be solved as production scales up. 

Looking ahead to 2030, if all announced projects are completed, there will be enough capacity to meet demand of 20-25 billion liters. (Figure 2). The challenge lies in executing the plans, ramping up production, and securing enough raw materials at competitive cost.

The majority of current and planned SAF facilities utilize HEFA technology (hydroprocessed esters and fatty acids), which is proven and cost-competitive but faces challenges due to rising costs of principal raw materials such as used cooking oil, virgin vegetable oils, and tallow. Some new HEFA facilities are exploring alternative raw materials, including Preem’s plants in Lysekil and Gothenburg, Sweden, which are expected to process tall oil, a by-product from pulp mills.

Another common technology, alcohol-to-jet (AtJ), involves fermentation of corn, sugar, and crop residues, but has higher manufacturing costs and is expected to see modest growth.

Figure 2: Capacity expansion plans for SAF, by production pathway

Of particular interest to the forest sector are the numerous new SAF facilities under construction or planned based on the Fischer-Tropsch (F-T) pathway.  This technology involves catalytic conversion of syn gas derived from solid lignocellulosic feedstocks – including logging residues, waste wood, and municipal solid waste. For instance, USA Bioenergy’s planned facility in Bon Wier, Texas, expected to begin operations in 2025-26, is based on this technology.

Additionally, there is growing anticipation for Power-to-Liquid (PtL) SAF production. Although no large-scale PtL facilities are currently operational, several are under construction or in planning stages, such as Infinium in West Texas and Arcadia e-Fuels in Vordingborg, Denmark. PtL is widely considered the ideal pathway for SAF production long-term, relying solely on carbon dioxide as a feedstock, sourced from ambient air or industrial emissions. However, scaling production and reducing costs hinge on overcoming challenges related to renewable electricity generation, a common hurdle in green electrification across various sectors. While PtL holds potential to become the dominant SAF production method in the future, this transition is not expected before 2040, based on current projections.