Scaling Sustainable Aviation Fuel for Long-Term Climate Impact

According to AAA, with Thanksgiving travel poised to set new records, nearly 80 million Americans are expected to hit the roads, board flights, or set sail. Air travel is leading the charge, with airlines such as American, Delta, and United forecasting record-breaking passenger volumes. American Airlines plans to shuttle 8.3 million travelers over the holiday period, a 6% increase from last year, while United Airlines reports a 20% jump in post-holiday demand compared to 2023.

As the aviation sector ramps up capacity to meet this demand, its environmental impact is under scrutiny. In 2023, U.S. aviation consumed over 25 billion gallons of jet fuel, contributing more than 230 million tons of CO2 emissions. Sustainable aviation fuel (SAF) offers a potential solution to decarbonize the skies, but its current adoption rates and policy support fall short of what’s needed to achieve meaningful emissions reductions.

Aviation’s Decarbonization Challenge

Aviation is among the fastest-growing contributors to global greenhouse gas emissions, yet its pathway to net-zero is fraught with challenges. Despite a surge in commitments from airlines and policymakers, SAF accounted for just 0.1% of total jet fuel consumption in the U.S. in 2023. SAF is widely regarded as critical to reducing aviation emissions, with the International Air Transport Association (IATA) estimating it will contribute 65% of the reductions needed to achieve net-zero aviation by 2050.

SAF can reduce lifecycle emissions by up to 80% compared to fossil-based jet fuel. However, high production costs, limited feedstock availability, and an immature policy landscape hinder its ability to scale. These barriers have left SAF in a paradoxical position—vital to the future of sustainable air travel but underutilized in the present.

SAF Policy Landscape: Progress and Limitations

Recognizing the importance of SAF, both federal and state governments in the U.S. have introduced policies to support its development. The Inflation Reduction Act (IRA) offers tax credits of up to $1.75 per gallon of SAF, but these expire in 2027, creating uncertainty for long-term investments.

At the state level, the policy landscape is mixed. A recent analysis by the International Council on Clean Transportation (ICCT) graded SAF policies in several states based on their effectiveness in promoting decarbonization, sustainability, and equity:

• Washington and California: These states lead the charge with robust support for SAF through clean fuel standards and tax credits tied to greenhouse gas reductions. Washington’s policies, for instance, combine state tax credits with federal incentives, creating a supportive environment for second-generation SAF production.
• Illinois: Illinois stands out for its sustainability safeguards, including a cap on soybean oil-based SAF to reduce deforestation risks associated with expanded feedstock production.
• Minnesota and Nebraska: These states lag, offering short-term subsidies that do little to incentivize advanced SAF technologies or long-term investment.

However, a significant policy gap persists across most states: SAF subsidies are often funded through road-sector credits or general revenue rather than imposing a direct cost on the aviation industry. This violates the “polluter pays” principle, limiting the effectiveness of these incentives in driving behavioral change within the sector.

Challenges to Widespread SAF Adoption

• High Production Costs: SAF costs between $4 and $8 per gallon compared to $2 for traditional jet fuel, making it difficult for airlines to adopt SAF at scale without significant subsidies or mandates.
• Feedstock Limitations: Most SAF production relies on HEFA (hydroprocessed esters and fatty acids) derived from waste oils, which have limited availability. Scaling SAF production will require transitioning to advanced pathways such as power-to-liquids (PtL) and cellulosic biofuels.
• Policy Uncertainty: With federal tax credits set to expire in 2027 and many state policies offering limited long-term support, investors face uncertainty about the financial viability of SAF projects.
• Equity Concerns: Many SAF policies rely on subsidies funded by road-sector emissions credits or general taxpayer dollars, rather than addressing the aviation industry’s environmental footprint directly.

Coordinated Action

Addressing these challenges will require coordinated action from federal and state governments, the private sector, and industry stakeholders. Key recommendations include:

• Extend Policy Horizons: Federal tax credits and state-level incentives must be extended beyond 2027 to provide the financial certainty needed for long-term SAF investments. A 10- to 15-year policy horizon is critical to de-risk capital-intensive projects.
• Shift Funding Responsibility: SAF subsidies should be funded within the aviation sector through carbon taxes on jet fuel or penalties for emissions, aligning with the “polluter pays” principle.
• Prioritize Advanced Pathways: Policymakers must focus on transformative SAF technologies, such as PtL and second-generation biofuels, which offer greater scalability and deeper emissions reductions.
• Enforce Sustainability Criteria: States should adopt stricter lifecycle carbon analyses and safeguards to ensure that SAF production does not contribute to deforestation, biodiversity loss, or water scarcity.
• Mandate SAF Use: Introducing mandates for SAF blending in jet fuel and penalties for fossil fuel use could accelerate adoption and create a stable market for sustainable fuels.

Why SAF Matters Now

As Americans prepare for record-breaking holiday travel, the environmental stakes are higher than ever. Airlines like United are already seeing a 20% increase in post-holiday passenger volumes compared to 2023. While this growth reflects the resilience of the aviation industry, it also underscores its environmental responsibility.

Scaling SAF adoption is not just about meeting long-term climate goals—it’s about addressing the immediate emissions impact of an industry poised for unprecedented growth. The technologies and policies needed to decarbonize aviation exist, but their implementation requires urgency, ambition, and collaboration.