Sustainable aviation fuel (SAF) won’t be commonplace anytime soon because its production is being hindered by significant land requirements and rising costs, according to Oilprice.com.
Challenges facing SAF
- Adoption of SAF by airlines has been disappointing so far, with U.S. aircraft consuming only 15.8 million gallons in 2022 compared to 11.9 billion gallons of conventional jet fuel.
- A report by the Institute for Policy Studies states there is “no realistic or scalable alternative” to kerosene-based jet fuels that can replace them quickly enough to avert dangerous climate change, despite public subsidies.
- Producing enough SAF from ethanol to meet President Joe Biden’s 2030 target would require 114 million acres of corn in the U.S., a 20% increase in current cropland area. In the UK, 50% of agricultural land would be needed.
- This land use change could threaten food security and undermine carbon sequestration efforts like preserving forests and wetlands, working against the Paris Agreement emissions goals.
- SAF prices are currently over double conventional jet fuel at $6.69 per gallon. Replacing just 10% of jet fuel with SAFs would significantly impact airline operating costs.
Growth prospects for SAF
- Despite challenges, the SAF sector is poised for major growth, with airlines committing to 6 billion liters of SAF in forward purchase agreements by 2023, 10 times current global production.
- Costs are expected to decrease as production scales up and supply agreements strengthen.
- Major U.S. airlines like Delta and Southwest have committed to replacing 10% of their jet fuel with SAF by 2030.
- The EU has introduced mandates for increasing SAF use at airports from 2% in 2025 up to 70% by 2050.
Bottom line: While SAF faces significant hurdles around scalability, land use, costs and adoption rates, the sector is still projected for substantial growth driven by airline commitments and regulatory mandates, which could help bring costs down over time.
