Sustainable Aviation Fuel (SAF) is often hailed as a groundbreaking solution, capable of achieving near net-zero emissions and produced from a variety of sources, including waste. As a “drop-in” fuel, it allows airlines to use it without the need for new infrastructure or specialized engines. According to the International Air Transport Association, airlines can cut their carbon dioxide emissions by approximately 80% when using SAF. The demand for SAF is substantial, with many airlines expressing a strong desire to incorporate it into their operations. However, the industry’s shift to cleaner energy faces two significant challenges: supply and cost.
In 2023, US airlines consumed 12.4 billion gallons of fuel, as reported by the US Department of Transportation. From January to July of this year, fuel consumption reached about 7.3 billion gallons, reflecting a nearly 3% increase compared to the same period last year. The Federal Aviation Administration (FAA) estimated that about 26.3 million gallons of SAF were produced in the United States last year, which accounts for only about 1% of what is needed for US carriers to achieve a 50% SAF blend.
Jeff Davidman, Delta Air Lines’ vice president of government affairs, highlighted the shortage at a recent Ag Outlook Forum in Kansas City, saying, “We’re projected to produce around 608 million gallons of SAF globally this year, but our airline alone consumes 4 billion gallons of jet fuel annually.”
While SAF production is on the rise, driven by demand from airlines and sustainability advocates, it still falls short of meeting needs. The FAA reported that SAF production in the US increased from 2 million gallons in 2016 to 16 million gallons in 2022, and then to 26 million gallons in 2023. Yet, even with global production expected to exceed 600 million gallons in 2024, this will only represent about 1.2% of the fuel required to achieve a 50% SAF blend in the aviation sector, which is projected to consume 99 billion gallons of fuel worldwide, according to the International Air Transport Association.
For airlines to consider integrating sustainability measures that include increased SAF usage, production must scale rapidly. This challenge largely falls on the fuel production sector.
Donnell Rehagen, CEO of Clean Fuels Alliance America, remarked at the Ag Outlook Forum, “We’re talking about billions of dollars. Building a single plant can cost a couple or three billion. These decisions can’t be made lightly. Federal and state policies are becoming increasingly important; when they align, it creates more certainty for investors, which is crucial for getting this industry moving as airlines need.”
The Biden administration’s Inflation Reduction Act has introduced a tax credit for SAF sold or used between December 31, 2022, and January 1, 2025. However, Davidman expressed concern that this timeframe is insufficient for scaling production to meet industry needs.