Insights on Sustainable Aviation Fuel Market

Aug 23, 2024

SAF Insights Podcast: Sustainable Aviation Fuel (SAF)

Participants

  • Host: Julia Esquedrin, Associate Editor for Biofuels at Argus
  • Guest: Tim Cezarek, Chief Commercial Officer at Jivo

Overview

  • The podcast focuses on sustainable aviation fuel (SAF) and its market forces.
  • Discussion covers Jivo's production projects, the alcohol-to-jet production pathway, and the global SAF market.

Jivo's Production Plans

  • Current Projects:
    • Jivo is developing a plant in Lake Preston, South Dakota.
    • Plans to close the purchase of the Net Zero One plant land in Lake Preston.
    • Key milestones expected in the latter half of the year.
    • Aiming to break ground by the end of the year and start production by the end of 2025.
    • Expected production: 50 million gallons of SAF, 8 million gallons of renewable naphtha, and 4 million gallons of renewable diesel.
    • Additional products: animal feed from proteins and corn oil.
  • Location Strategy: Mainly focused on the U.S., considering other regions.
  • Future Expansion: Exploring greenfield sites and joint ventures with existing ethanol plants.

Alcohol-to-Jet Pathway

  • Core Production Pathway: Focused on alcohol-to-jet as the primary method for low-carbon hydrocarbons.
  • Challenges: Minimal compared to other pathways.
    • Abundance of feedstocks like low-carbon corn and carbohydrates in the U.S.
  • Co-products: Produces significant amounts of protein, beneficial for the food chain.

Offtake Agreements

  • Importance: Critical for securing financing and providing certainty to investors about volume and pricing.
  • Current Deals: Over 200 million gallons per year, including an MOU with One World Alliance.
  • Market Impact: Demand for SAF expected to outstrip supply, supporting robust spot pricing.

Market Development

  • Regional Focus: Primarily in the U.S. and Canada, with potential in Brazil and India due to carbohydrate abundance.
  • Decarbonization: Requires integration of renewable energy sources to reduce process emissions.
  • Policy and Permitting: Favor regions with clear, transparent policy and straightforward permitting processes.

Policy and Incentives

  • Certainty and Transparency: Essential for investment decisions.
  • U.S. System: Offers clear carbon pricing and a reliable policy framework (e.g., California LCFS).
  • Global Considerations: The need for harmonized policies, particularly in the EU, to ensure stable investment environments.
  • Preference for Incentives: Jivo prefers incentive-based systems over mandates.

Future Outlook

  • India: Potential growth due to energy independence priorities and abundant carbohydrate resources.
  • Overall Market: Progress in legislative clarity is key to scaling production and investment.

Conclusion

  • The discussion highlights the need for legislative clarity and consistent policy frameworks to foster growth in the SAF industry.
  • Further Listening: Other episodes of the SAF Insights series are available for more insights into the sustainable aviation fuel market.