Biofuels and Sustainable Aviation Fuel (SAF) represent critical pathways for decarbonizing the global energy mix. The transportation sector is responsible for nearly 15% of global greenhouse gas (GHG) emissions. While the road transportation segment is making strides toward electrification with electric vehicles (EVs), the aviation and maritime sectors face significant limitations in this regard, relying primarily on conventional fuels, except for smaller, lightweight aircraft and vessels.
With air travel expected to double by 2050, GHG emissions are projected to rise correspondingly. This increase will make it more difficult to meet net-zero targets by mid-century. The market for biofuels and sustainable aviation fuel is anticipated to grow at a compound annual growth rate (CAGR) of 40-50%. This sector is driven notably by government mandates, differentiating it from other renewable energy segments.
Countries like the U.S., Brazil, and India are promoting alcohol-based SAF derived from feedstocks such as sugarcane, corn, soybeans, beets, and various oilseed crops to bolster their agricultural economies.
Many SAF projects are nearing their Final Investment Decision (FID), although they face some hurdles related to costs and technical challenges. Traditional oil and gas companies are expected to play a critical role in progressing SAF due to their established cash flow, existing infrastructure, and supply chain advantages. On the other hand, smaller independent producers actively seek investments to fund their initiatives.
Addressing the cost challenges of Sustainable Aviation Fuel adoption
One of the most significant hurdles to adopting sustainable aviation fuels is its cost. Currently, biofuel-based SAF is priced at two to three times the cost of traditional jet fuel. The cost of eSAF can be six to eight times higher. The aviation industry operates in a highly competitive environment characterized by slim profit margins and substantial liability tied to safety regulations, posing a considerable challenge. Spending two to eight times more on fuel is unsustainable for many airlines unless these expenses constitute only a small fraction of their overall fuel costs.
The initial European mandate requiring a 2% SAF blend may appear minimal, but the gradual increase will be significant in the near future. Consequently, one of the options for airlines is to pass this added cost on to consumers. For instance, if the average ticket price is $500, a 2% SAF blend could result in a $10 increase in ticket prices. This raises the critical question: would customers be willing to pay an additional $10 for a flight that incorporates 2% SAF?
A shared hope among the aviation industry and SAF producers is that SAF production costs will decrease over time achieving cost parity with fossil fuel generation in certain countries.
The SAF movement has commenced, promising to lower emissions by 80-90% compared to traditional jet fuel. However, the pressing challenge now is to accelerate SAF projects to meet net-zero emissions targets by 2050. To address this, both capital expenditures (CAPEX) and operational expenditures (OPEX), alongside technical challenges, must be overcome.
Several digitalization and electrification strategies can potentially expedite the progress of SAF projects, aiming to lower overall costs and enhance efficiency. These initiatives are critical to unlocking the full potential of SAF and achieving sustainability goals in the aviation sector.
Unified power & process management
Historically, power management and process automation have operated as distinct entities, a division that has hindered facilities from maximizing efficiency. However, the gradual electrification and integration of renewable energy sources into the power mix are driving a transformative shift toward the simultaneous management of both energy carriers—molecules and electrons. In the context of the eSAF pathway, green hydrogen is produced through energy-intensive electrolyzers, which account for approximately 60-70% of operational costs.
This convergence of decarbonization, digitalization, and the need to lower capital expenditures (CapEx) and operational expenses (OpEx) is prompting the industry to reassess traditional methodologies in process automation and power management.
Energy companies are increasingly recognizing digitalization as a vital enabler of their business objectives, eager to leverage its potential, even though the route to implementation can be complex. For many organizations, the logical initial step is to integrate power and process management systems. The subsequent phase involves applying this unified approach across the entire lifecycle of the plant to ensure continuous value optimization.
By merging power management with process automation during the design phase, facilities can achieve a digital interconnection of power and processes that facilitates critical data capture. Using this data in a digital twin, which simulates the plant’s operational lifecycle. Incorporating real-time performance data allows the integrated power and process digital twin to deliver significant advantages, including:
- Up to 20% savings in overall CapEx while keeping projects on schedule
- A 10% reduction in process energy costs
- Up to a 35% decrease in direct CO₂ emissions
- A 15% reduction in downtime
- A 3% overall improvement in profitability
Electrification
Green electricity offers the fastest pathway to decarbonization, facilitating operational improvements in process duration and controls. Biofuels and sustainable aviation fuel plants share many characteristics with small chemical plants. They feature reactors, tanks, towers, compressors, pumps, boilers, and heaters. In a typical chemical plant, the primary power source remains predominantly fossil-based, accounting for 80-90% of energy use. The remainder is sourced from grid electricity (10-20%). In the case of eSAF, the integration of electrolyzers elevates electrification from 10-20% to a substantial 60-70%.
Significant opportunities exist to reduce greenhouse gas emissions through electrification, such as electrifying boilers, heaters, compressors, and pumps. By moving towards greater electrification within these facilities, companies can streamline operations and contribute to meaningful emissions reductions.
Microgrid optimization enhanced by AI
The integration of renewable energy sources and battery storage into the electrical grid, alongside traditional fossil fuel power, presents both challenges and opportunities for optimizing energy costs and advancing decarbonization efforts.
This shift allows prosumers to sell excess electricity back to the grid, enabling strategies such as arbitrage. Where they utilize low-cost energy for charging batteries and reselling during periods of high demand. As a result, microgrid optimization emerges as a crucial consideration for Sustainable Aviation Fuel (SAF) producers. Aditionally, Artificial Intelligence analyzes and optimizes energy sources, safety, and profitability.
Modularization and standardization
Currently, aside from the Hydroprocessed Esters and Fatty Acids (HEFA) pathway, SAF production pathways remain primarily in pilot or small-scale commercial phases. Developers and process original equipment manufacturers (OEMs) are adopting a modular design approach based on three key factors:
- Individual process units that easily transport and deploy near feedstock sources
- Pilot plants scaled up economically by adding additional modules
- Standardization of processes to reduce engineering and construction costs.
Carbon tracking
SAF off-takers will demand proof and certification of the carbon intensity associated with the SAF fuels they procure. In response, SAF producers must effectively track carbon intensity throughout the value chain, particularly during the production process. A comprehensive carbon index will be necessary to meet regulatory mandates and support claims for carbon credits. Tracking carbon intensity will involve monitoring the following:
- the overall SAF produced
- the carbon intensity of feedstocks
- the amount of energy consumed during production and transportation
Biofuels and SAF are essential components of the energy transition. Their successful integration into the aviation sector requires concerted efforts to address cost barriers, leverage technological advancements, and ensure supportive policies are in place. Without these measures, the goal of achieving net-zero emissions in aviation remains a formidable task. The biofuels and SAF segments have already started and are accelerating ahead; digitalization and electrification is boosting this transition.
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