A question from viewer Carlton Nelson, in Kerkhoven, Minn., about soybeans and airplanes:
“I’ve heard that there is a push to develop airplane fuel from soybeans,” writes Nelson. “It sounds like the demand will increase tremendously with-in the next two years. Yet I asked a liquid fuels representative at a recent co-op meeting, and he only talked about ethanol. Is there really a bright future for soybean flight fuel or not? What’s the truth?”
About a year ago, some USDA scientists announced a process to make sustainable aviation fuel (SAF) from soybean oil. Commodity organizations looked at the aviation fuel consumption numbers and fell in love, but I have questions.
- SAF would be another mandated market, sustained by tax dollars and regulation. As producers fret over what is going to happen to ethanol and the RFS why would we want to add another artificial demand subject to political whims?
- Given the less than spectacular success of soy biodiesel, investors and customers may be leery about depending on SAF from soy.
- SAF can be made from lots of feedstocks other than soy oil, like wood chips, municipal waste, and notably, ethanol. Plus even our domestic air fleet will source SAF from the cheapest supplier, which may not be us.
- The current price of soybeans isn’t exactly terrible, even with good world production. Forcing a large new demand by regulation in the face of contrary economics doesn’t seem like an attractive business case to draw the investment dollars needed for what one expert estimated as 60 new processing plants.
- Estimates of production capacity needed for SAF range from 8 million new acres to 30 million depending on assumptions. Any number in that range will turn the battle for acres with corn, cotton, and wheat into a market upheaval whose outcome could be far different than just raising soy oil prices. Massive expansion of soybean production in Brazil and elsewhere springs to mind. It might also be the kiss of death for US cotton production.
- If we effectively impose SAF for planes for climate reasons, shouldn’t farmers support a similar farm fuel regulation?
Just because you can make SAF from soy oil, doesn’t mean economics or public acceptance will support the idea. I’d say the future for soy SAF is more hype than hope.
