US sustainable aviation fuel production target faces cost, margin challenges.
The United States’ goal of rapidly ramping up production of sustainable aviation fuel (SAF) may encounter strong headwinds as producers balk at the low margins for the biofuel and some airlines flag concerns over the costly switch, experts said.
President Joe Biden, who has made tackling climate change a central pillar of his administration, launched a challenge in 2021 to supply at least 3 billion gallons of SAF annually by 2030, a steep jump from the current 15.8 million gallons as per U.S. government data.
U.S. production of SAF will be 2.1 billion gallons by 2030, S&P Global Commodity Insights has estimated, based on upcoming projects.
“A lot of additional investment (is) needed to hit that (3 billion) target,” said Wood Mackenzie analyst Gordon McManus.
A lot is riding on SAF as the U.S. Energy Department has said alternative sources, such as battery technologies and hydrogen, are not expected to contribute to substantially reducing aviation emissions until after 2050.
U.S. sustainable aviation fuel production target faces cost, margin challenges, November 1, 2023
