PTQ Q4 2026 Issue

Monetising biomass-to-SAF investments

Embedding compliance to unlock carbon credit value for the alcohol-to-jet pathway

Kristine Klavers EcoEngineers

E very week, investors and project developers ask the same question: “We’re ready, when do we get our credit value?” The answer is almost always more complicated than they expect. Unlocking the full economic value of a biomass-to-sustainable aviation fuel (SAF) investment is not simply a matter of building a plant and switching it on. It requires regulatory compliance to be built in from day one, a clear understanding of how each credit programme works, and an acceptance that 99% compli- ance is, in practice, 100% non-compliance. This article covers the alcohol-to-jet (ATJ) pathway, one of the most commercially active routes from biomass to SAF. It maps the compliance and credit landscape across US federal programmes, the California Low Carbon Fuel Standard (CA-LCFS), European requirements, and the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). The aim is to show investors how to de-risk a project and maximise return on investment (ROI) by treating compliance as a core project development and commercial discipline, not a late-stage administrative task. De-risking the low-carbon Investment The standard checklist for de-risking a new fuel plant cov- ers market, technology, feedstock, logistics, and offtake. Those five boxes are necessary, but they only get you to the wholesale price of the litre. When the business case depends on carbon credits, there are six additional disci- plines to address: • Measure your carbon intensity (CI) score at the design stage. This is the number investors will scrutinise and the basis on which programme-dependent credits are calculated. • Recognise that regulations are jurisdictional. The US Renewable Fuel Standard (RFS), 45Z federal tax credit, CA-LCFS, EU Renewable Energy Directive III (RED III), and CORSIA all use different measurement methodologies, have different eligibility rules, and run on different timelines. • Confirm eligibility of your feedstock and process for each programme you intend to access. • Establish traceability from feedstock origin through to finished fuel delivery. Verifiers will require it. • Account for timing. Credit programmes have petition processes, operational milestones, and verification cycles that can take years.

99% COMPLIANCE

100% NON-COMPLIANCE

Carbon credit programmes have zero tolerance for compliance gaps. A single missing requirement eliminates the entire credit value – not a proportional share.

Figure 1 The compliance imperative: 99% is not enough

• Verify. Independent third-party verification is mandatory across every major credit programme. One case study shows what happens when this goes wrong. One operator converted an existing refinery to renewable fuels production and invested heavily in compli- ance with California LCFS carbon credits at the centre of its business case. The facility was generating credits under a feedstock to finished fuel temporary pathway while it waited for a site-specific provisional pathway to be certified. Generally, the CI scores for temporary pathways gen- erate fewer credits than a site-specific CI score, causing a shortfall in actual revenue vs projected revenue. The com- pany ran into serious financial difficulties, bankruptcy, and a formal restructuring of the company, returning the facility to conventional hydrocarbon production. The lesson is clear: if the financial model depends on credit revenue, the timeline for receiving that revenue must be in the project plan from the start (see Figure 1 ). ATJ pathway and ASTM approval Before any carbon credit can be sold through offtake agreements, the fuel must meet ASTM International spec- ifications. ASTM D7566 governs SAF and currently recog - nises eight production pathways, including Fischer-Tropsch (FT-SPK), hydroprocessed esters and fatty acids (HEFA- SPK), fermented sugars (HFS-SIP), and alcohol-to-jet (ATJ- SPK). ATJ, which converts ethanol or isobutanol into jet fuel, carries a 50% blend limit, considerably more favourable than co-processed HEFA, which is capped at 5%.

PTQ Q4 2026