ecoFT Company Profile - Book - Page 14
SAF DEMAND
The EU Commission
announcement in July
2021 on proposed SAF
blending mandates from
2025, including PtX SAF
(e-fuel) specific mandate,
is setting the pace for
transformation in the
aviation fuel industry.
While Europe is leading the world with promoting SAF production and use, other regions
and countries are following suit. For example, in September 2021, the White House
announced a range of federal actions which include a new Sustainable Aviation Fuel
Grand Challenge to inspire the dramatic increase in the production of SAF to at least 3
billion gallons per year by 2030, and new and ongoing funding opportunities to support
SAF projects and fuel producers totalling up to $4.3 billion.
While the PtX process is currently a relatively costly route to produce SAF, but the
unit costs are expected to reduce significantly with reduction in the cost of renewable
electricity and electrolysis, ongoing R&D, and with increase in plants’ capacities
(economies of scale). However, PtX SAF production costs are unlikely to reach those of
conventional jet fuel, in the absence of externalizing climate costs through carbon prices
and penalties for non-compliance with the blending mandates. Once these are included,
SAF will rightly continue to be priced at a premium relative to fossil fuels.
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