Abstract
Sustainable aviation fuel (SAF) offers multiple benefits compared to conventional fossil jet fuel, including decarbonized aviation, reduced reliance on imported foreign petroleum from geopolitically challenging regions, and opportunities to valorize domestic feedstocks, thereby stimulating local agriculture and economic development. U.S. federal agencies and others have made significant investments in SAF infrastructure over the last several years through the SAF Grand Challenges, leading to appreciable growth in SAF production on the West Coast and in the Midwest. However, SAF production and use on the East Coast lag behind other regions. It is anticipated that the commercialization of SAF in Virginia could have multiple economic benefits for the Commonwealth, including protecting the competitiveness of Washington Dulles International Airport and stimulating economic development in the agricultural, forestry, and biomass processing and transport industries. Accordingly, the Commonwealth has supported SAF supply chain research for more than a decade, with a focus mostly on supply chains operating entirely within state borders. The goal of this study is to update the understanding of SAF supply chain readiness and competitiveness in Virginia to account for several new approaches to increase SAF availability, most notably imports from newly operational production facilities. Two well-known, previously validated federal modeling tools, the Federal Transportation Optimization Tool (FTOT) and ASCENT techno-economic assessment (TEA) workbooks were used to quantify SAF production and transportation costs, assuming multiple different SAF production platforms and various multimodal transport networks. Results suggest that importing SAF is more cost-effective in the near term. Average minimum selling prices (MSPs) are $4.41/gal and $8.00/gal, respectively, without relevant incentives, for import versus production in hypothetical (not yet existing) Virginia facilities. Applying current federal incentives, anticipated MSPs are reduced to $4.22–$4.14/gal for imported SAF and $7.70–$7.62/gal for hypothetical in-state production (based on previously published work).
Estimated values of MSP for two different import-based supply chains are not meaningfully different from one another, and the average estimated value is comparable to the historical price of fossil-derived jet fuel over the past 10–15 years (i.e., $2.22/gal). A recently proposed Virginia SAF incentive would reduce the MSP for in-state SAF to approximately $7.89/gal, but it would intentionally exclude SAF produced out of state.
Given the various kinds of economic benefits that are possible via SAF commercialization, it is critical that Virginia and other states fully understand how differently structured incentives applied to various parts of the supply chain (life cycle) of SAF or other bio- products could create benefits of different magnitudes for different stakeholders (e.g., airlines, airports, farmers, foresters, converters, exporters, etc.), before locking in specific investments.
