US production capacity for SAF to grow

Developers expect Phillips 66’s Rodeo Renewed project to produce up to approximatrly 10 000 bpd of SAF beginning this summer, and they expect Diamond Green Diesel’s Port Arthur SAF project to produce about 15 000 bpd of SAF by the end of the year.

Investments in SAF have increased due to the US Environmental Protection Agency (EPA)’s Renewable Fuel Standard (RFS), federal tax credits, and state programmes and tax credits incentivising use of the fuel. The White House also set a goal of meeting 100% of US aviation fuel demand with SAF by 2050. About 1.6 million bpd of petroleum jet fuel was consumed in the US in 2023, and the EIA projects US jet fuel demand in 2050 to exceed 2 million bpd in its 2023 ‘Annual Energy Outlook’.

The EIA captures SAF production data in the Other Biofuels category of its ‘Petroleum Supply Monthly’. In addition to SAF, the EIA’s Other Biofuels category includes renewable heating oil, renewable naphtha, renewable propane, renewable gasoline, and other emerging biofuels that are in various stages of development and commercialisation.

Historically, production of Other Biofuels in the US has been minimal. However, because renewable naphtha and renewable propane are by-products of a growing renewable diesel industry, production of Other Biofuels has been growing as well. US production of Other Biofuels increased from just 2 000 bpd in 2020 to 19 000 bpd in 2023.

SAF production has historically comprised a small portion of Other Biofuels production because of restricted production capacity. At the beginning of 2024, US SAF production capacity was only around 2000 bpd, with only two plants capable of producing SAF: World Energy’s plant in Paramount, California, and Montana Renewables’ plant in Great Falls, Montana.

In its latest Short-Term Energy Outlook, the EIA forecasts that US production of Other Biofuels will increase by about 50% in 2024 and almost double from 2024 to 2025. The EIA does not publish a forecast for each fuel that makes up the category.

The primary driver for its forecasted increase in Other Biofuels production — from 19 000 bpd in 2023 to 51 000 bpd in 2025 — is increasing US SAF production capacity. Because the EIA forecasts renewable diesel production to continue increasing, it also expects production of renewable diesel by-products to increase through 2025 and explain some of the growth in its Other Biofuels production forecast.

Read the article online at: https://www.hydrocarbonengineering.com/the-environment/17072024/us-production-capacity-for-saf-to-grow/