Feasibility Analysis of Regional SAF Production: A Case Study in Virginia

Because the aviation sector of the economy is difficult to decarbonize, large investments are being made in developing and scaling sustainable aviation fuel (SAF) technology. The Inflation Reduction Act brought new federal tax credits for SAF into effect as of August 2022. At the state level, extra incentives may be desired to persuade companies and airlines to invest in SAF infrastructure. This study analyzed SAF production in Virginia via two biomass-to-energy conversion platforms, gasification Fischer Tropsch (GFT) and pyrolysis, as applied to two organic feedstocks: woody wastes and municipal solid wastes. Previously validated analysis models, including the Freight and fuel Transportation Optimization Tool from the U.S. Department of Transportation and techno-economic assessments from the Aviation Sustainability Center (ASCENT) (funded by the Federal Aviation Administration), were used to evaluate possible SAF supply chain implementation at the county scale in Virginia. Systems boundaries encompassed feedstock collection and transportation, conversion, and fuel upgrading and transport. Key model outputs were minimum product selling price (MPSP) ($/gallon) and life-cycle global warming potential (GWP) (g CO2eq/MJ). These data were used to compare hypothetical SAF production in Virginia with relevant benchmarks and to assess what impact state-level investments of different magnitudes and/or different modes would have on economic performance relative to conventional jet fuel. Results suggest that a median case, representative “pilot” GFT facility in Virginia will require financial incentives of approximately $3.61 per gallon, in addition to existing incentives, to be cost-competitive with fossil fuels. A median case, representative pilot pyrolysis facility will require financial incentives on the order of $0.75 per gallon of SAF. These amounts correspond to Pittsylvania County, which was found to be a typical case among five selected counties. Specific SAF prices were found to vary by location due to transportation logistics. Other favorable locations for pilot facilities include Alleghany, Buckingham, Greensville, and Tazewell Counties. Incentives to close the price gap between SAF and fossil jet fuel could be structured in different ways (i.e., tax credits, loan forgiveness, etc.) to benefit different stakeholders (e.g., feedstock producers, conversion facilities, etc.). Similarly, production facilities could be sited in different geographic locations to benefit different regions and take advantage of feedstock resources and transportation infrastructure access. Having delivered cost projections for SAF from GFT and pyrolysis processes, it was also possible to compare the two platforms and evaluate to what extent the recent changes to federal SAF incentives are structured to efficiently motivate the full decarbonization of SAF supply chains. Results from this study highlight a misalignment of environmental and economic impacts under current federal incentives; whereby, it is not economically efficient to pursue GWP reductions to the fullest extent possible via existing technology platforms. Finally, though Virginia was used as a case study for this analysis, it is anticipated that the methodology is replicable for other states or regions.