PTQ Q4 2026 Issue

continues and airline compli- ance mandates grow, there are signs this balance is shift- ing. Investors coming to mar- ket now have an opportunity to negotiate cost-of-produc- tion terms before demand significantly outpaces supply. The broader energy price environment is also providing momentum. Rising fossil fuel costs strengthen the eco- nomic case for renewables, and there is growing political pressure in many markets to

Embed compliance. Reduce risk. Increase ROI.

The three outcomes that follow from treating compliance as a project discipline, not an afterthought

Reduce risk Eliminate credit-loss risk from non-compliance or late certication Compliance embedded from day one prevents the Vertex scenario

Increased speed to market Parallel compliance and engineering tracks compress time to rst credit

Increase ROI Full credit stack: RFS + 45Z + CA-LCFS + RED III + CORSIA

Each programme adds layered value above the commodity price

Certications progress during construction, not after

“99% compliance is, in this industry, 100% non-compliance.” – Kristine Klavers, EcoEngineers

Figure 5 Embedding compliance to monetise low-carbon investment

credit programmes, CORSIA is a practical entry point to global credit markets. US credit stack To put the credit stack in practical terms: based on current market rates, a fully compliant ATJ-SAF producer accessing all available US programmes can expect to layer the follow- ing on top of the wholesale fuel price. RFS D4 RINs have recently traded at around $1.50 per RIN. The 45Z credit adds up to $1.00 per gallon for qualifying SAF, and the California LCFS, once full certification is achieved, has been generating approximately $62.50 per metric tonne of CO₂ equivalent avoided. For a plant producing 30 million gallons of ATJ-SAF per year and fully enrolled in all three programmes, combined credit revenue can comfortably exceed the commodity fuel margin. The wholesale SAF price is the floor of the revenue model, not the ceiling, provided compliance is embedded from the outset. The inverse is equally important to understand. A pro- ducer who misses a single QAP enrolment deadline; whose actual CI score deviates from the certified pathway value; or who fails a verification audit does not lose a proportional share of credit revenue. Under every programme described in this article, non-compliance is binary: the credits are not issued. This is why compliance milestones belong in the project schedule as hard engineering deliverables, given the same weight as commissioning dates and offtake agreements. Market dynamics: Offtake structure and pricing Credit value is only one part of SAF project economics. Offtake agreement structure matters a great deal. Around 75% of current SAF and renewable diesel offtake agree- ments are structured as fossil-fuel-plus agreements, mean- ing the SAF price moves with the jet fuel market rather than tracking the cost of production. When fossil fuel prices rise, these agreements make renewable fuel more expensive for airlines, and a number of airlines are now pushing back on agreements structured this way. Cost-of-production agreements, where the SAF price is indexed to feedstock and operating costs, give produc- ers more stable economics. However, they represent only about one-in-four deals today. As fossil fuel price volatility

reduce reliance on imported hydrocarbons. Australia’s recent public discussion about its level of renewable exports while domestic fuel costs remain high is one illustration of a shift in sentiment that is relevant to SAF investment globally. Embed compliance, increase ROI safeguard The investment case for biomass-to-SAF via the ATJ path- way is strong, provided investors understand the full com- pliance journey (see Figure 5 ). Demand is there (regulatory mandates are growing globally), technology is there (ATJ is ASTM-approved), feedstock options are available, and airlines are ready to buy. What investors consistently underestimate is the time, process rigour, and sequencing needed to unlock each layer of credit value on top of the commodity price. The key prin- ciples are straightforward, even when execution is not: • Calculate your CI score from the design phase and revisit it at every stage gate. • Treat each credit programme (RFS, 45Z, CA-LCFS, RED III, CORSIA) as a separate regulatory engagement with its own eligibility criteria, LCA model, verification standard, and timeline. • Build the credit timeline into the financial model. Do not assume day-one credit revenue. • Address biointermediate and QAP requirements early if your ATJ process involves ethanol as an intermediate product. • Resolve credit-stacking implications with feedstock sup- pliers at the term-sheet stage. Coming back to where the discussion started: 99% com- pliance is, in this industry, 100% non-compliance. The dif- ference between a profitable low-carbon investment and one that fails while waiting for credits to materialise almost always comes down to whether compliance was built in from day one. Investors who treat it as an afterthought will find that the credits they counted on arrive late, are lower in value than projected, or in the worst cases, do not arrive at all. Kristine Klavers is Managing Director, Global Low-Carbon Petroleum & Refining (renewable diesel and SAF) at Houston-based EcoEngineers, an LRQA company. Klavers directs renewable energy consulting and auditing at this energy transition advisory firm. Email: kklavers@ecoengineers.us

PTQ Q4 2026