COP26: Sustainable Aviation Fuel Poised to Play Critical Role as 20 Countries Commit to Net-Zero Aviation by 2050
In connection with the COP26 conference, the Federal Aviation Agency (FAA) on Tuesday released a 40-page US Aviation Climate Action Plan emphasizing the goal of bringing the US aviation sector to net-zero by 2050. Central to this goal is the increased use of sustainable aviation fuels (SAF)—a category of renewable biofuel blends that meet the same certification requirements as conventional jet fuel, but that result in lower greenhouse gas emissions on a lifecycle basis.
The FAA plan builds off of the Sustainable Aviation Fuel Grand Challenge, a multi-agency (DOT, DOE, USDA and others) effort announced in September, which itself posits a net-zero by 2050 goal along with commitments to accelerate research, development, demonstration and deployment of SAF. The Grand Challenge seeks to scale SAF production up to 3 billion gallons per year by 2030 and 35 billion gallons per year by 2050. These commitments require a drastic increase from the current domestic production level of only 4.5 million gallons of SAF per year.
The FAA plan was announced concurrently with Transportation Secretary Pete Buttigieg’s presence at the 26th UN Climate Conference in Glasgow, and on Wednesday, the United States joined 19 other countries in signing on to a UK-led Declaration establishing the International Aviation Climate Ambition Coalition. That Declaration recognizes the International Civil Aviation Organization (ICAO) as the appropriate forum for addressing emissions from aviation and commits the signatories to supporting the aspirational goal of net-zero aviation by 2050 and to promoting the development and deployment of sustainable aviation fuels.
SAF Identified as the Primary Method to Decarbonize Aviation
Both the FAA and the US Long Term Strategy on Net-Zero have identified aviation as a hard-to-decarbonize sector, due to the limited availability of replacements for liquid jet fuel. The FAA notes that electrification for aviation is not expected to be a solution for medium and long-range flights by 2050, and is not even a likely option for shorter-range business jets until after at least 2037. Hydrogen also is expected to remain a limited option, only available for shorter range flights due to hydrogen’s low energy per unit volume and an aircraft’s limited available space for fuel. Considering these limitations, the FAA concludes that “there is no realistic option that could replace liquid fuels in the commercial aircraft fleet in the coming decades.” Therefore, sustainable liquid fuels, in combination with efficiency improvements in aircraft technology and airline operations, will be heavily relied upon to reach net-zero emissions during a time period in which demand for aviation is projected to double.
SAF Fuel Credit and the Importance of Lifecycle Emissions Analysis
One method by which the Administration intends to incentivize increases in SAF usage is the SAF fuel credit, which is currently making its way through Congress as part of the $550 billion in climate-related funding included in the Build Back Better Act. This credit would be available to taxpayers who produce SAF within the US, provided that the fuel is later transferred into an aircraft engine within the US. However, only fuel mixtures which can be certified as reducing lifecycle GHG emissions by at least 50% as compared to conventional jet fuel would qualify as sustainable under the credit. The value of such credit would be $1.25/gallon, plus an additional $.01/gallon for each percentage point by which lifecycle emissions are reduced beyond 50%. Thus, since both qualification for the credit and the value of the credit will be tied to lifecycle emissions results, establishing low lifecycle emissions figures will be of high importance to SAF producers. Lifecycle emissions methodologies are to be determined by the USDA, in consultation with the DOE and EPA, and conforming to the ICAO protocol.
Currently, seven pathways of SAF are approved as “drop-in” fuels that can be immediately used in commercial engines and fuel distribution channels without needing modification to existing infrastructure. Each of these pathways is possible with various different feedstocks, thus each having different lifecycle emissions figures. According to the model (known as GREET) used by ICAO, several pathway-feedstock combinations already meet the 50% below conventional threshold of sustainability, while other combinations do not currently meet that threshold. However, the DOE has identified a menu of improvements that SAF producers can implement in order to improve their lifecycle emissions below the 50% mark. For example, DOE analysis using the most-recent version of GREET shows that the addition of carbon capture and storage equipment on ethanol mills would reduce the ethanol-to-jet (ETJ) pathway from 15% below conventional to 56% below conventional.
Other Identified Methods to Incentivize SAF
Beyond the proposed SAF Fuel Credit, the FAA Plan outlines several other steps to increase deployment of SAF. These methods, which are to be implemented with multi-agency coordination under the SAF Grand Challenge, fall into three categories:
- Reducing the cost of SAF, such as by providing production incentives, reducing supply chain costs, and reducing industry risks
- Enhancing the sustainability of SAF, such as by reducing the carbon intensity of supply chains, ensuring rigorous life cycle analysis, and enabling approvals of higher level SAF blends
- Expanding the supply and end use of SAF, such as by enabling approvals of additional SAF pathways, supporting regional feedstock and fuel production development, and catalyzing military and industry bulk purchases
© Arnold & Porter Kaye Scholer LLP 2021 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.
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