Potential of renewable fuels and SAF
A discussion of current technologies that can allow pivoting from renewable diesel to SAF and even revert to the full production of fossil fuels, as markets dictate
Woody Shiflett Blue Ridge Consulting
T he last decade has seen sustained demand growth (see Figure 1 ) in renewable fuels, building on more than two decades of technology development and commercialisation. Many efforts have been built upon the foundations of mature refining technologies such as hydrotreating and hydrocracking or more direct and simple processes such as transesterification to produce fatty acid methyl esters (FAME) for mainly biodiesel applications. Production of sustainable aviation fuel (SAF) has certainly lagged in absolute volume terms compared to renewable diesel (RD) and biodiesel (BD). More recently, however, SAF has shown notable growth rates, especially considering its small production volumes a few years ago (see Figure 2 ). Currently, the RD and BD domains are facing challenges, notably the collapse of US renewable identification num - bers (RIN) pricing (see Figure 3 ), an oversupply of BD/RD in the EU, and announced plant closures or repurposing.3 , 5 SAF potential Against this backdrop, could SAF serve as a refuge and placeholder in the renewables arena, given its global infra- structure and existing commercial and regulatory com- mitments? This potential, regarding anticipated future demand, will be examined along with current technologies that can enable a pivot from RD to SAF, with the ability to even revert to the full production of fossil fuels, as markets dictate. There may be some basis for starry-eyed optimism for significant SAF growth within this decade. In its base case scenario, the International Energy Agency (IEA) projects a 2,600% growth in global SAF demand from 2023 to 2028, rising to approximately 5.2 billion litres/year (~90,000 bar- rels/day), or about 1.1% of total projected demand. This is
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Figure 1 Five-year growth in renewable fuels3
contrasted with the corresponding IEA projection for ‘only’ 200% growth in RD to 26.4 billion litres/year (455,000 bar- rels/day), or about 1.5% of projected demand. The International Air Transport Association (IATA) issued an even more bullish recommendation to reduce aviation carbon intensity by 5% by 2030. This was agreed during the Third Conference on Aviation and Alternative Fuels (CAAF/3 – November 2023), calling for 17.5 billion litres/ year (300,000 barrels/day) by 2030. Additionally, the US Departments of Energy, Transportation, and Agriculture (DOE, DOT, and USDA) have formulated a SAF Grand Challenge, aiming for domestic SAF production to reach 3 billion gallons (11 billion litres/year or 200,000 barrels/day) annually by 2030. Regional uncertainty and differences in regulations,
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Figure 2 Growth in sustainable aviation fuel 1,2
Figure 3 Collapse of US D4 RIN values
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PTQ Q1 2025
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