As biofuel investment makes a comeback, new factors are fueling its takeoff, including the sustainable aviation fuel (SAF) market.
Airlines including United, American and Delta aim to blend 10% SAF into their jet fuel supply by 2030. At the Illinois Future of Fuels: Sustainable Aviation Fuels and Beyond Conference, Sean Newsum, Airlines for America managing director for environmental affairs, emphasized that evolved partnerships between airline, biofuel, agriculture and oil and gas industries are what will make SAF become a reality.
“SAF creates new economic opportunities for the airlines in terms of reducing their carbon emissions cost exposure and automation exposure,” Newsum said during the March 12-13 event in Rosemont (Cook County), adding that SAF also “creates new opportunities for farmers and biofuel producers around the world and here in Illinois.”
Jade Patterson, a renewable fuels researcher with BloombergNEF, said the biofuel market initially peaked around 2006-07 but has seen significant growth in the last four to five years. Last year, global investments in the market reached about $10 billion, with 42% coming from the U.S.
Growth in the types of feedstocks being used for biofuels, including soybean, corn and canola oil, has impacted the expansion of the biofuel market. Additionally, Patterson said oil and gas companies are starting to invest more in low carbon energy, providing “some resiliency and more policies for renewable fuels.”
“Now that they’re invested in the renewable fuel market, I think they’ll be more willing to partner with the renewable fuels companies,” Patterson said about oil and gas companies, noting that they have been historically opposed to increasing biofuel blending.
However, Patterson said the rise in electric vehicle (EV) use could threaten the demand for biofuels. Over time, electric vehicles are becoming more cost competitive. In 2024, 8% of new cars purchased were EVs and BloombergNEF predicts this number could reach 33% by 2030.
“Over time, as you increase electric vehicle fleet, you’re going to decrease the amount of gasoline and diesel you need,” Patterson told FarmWeek. “This has implications for biofuels as well, because biofuels are typically blended with gasoline and diesel. And as those demand rates fall, you also see demand for biofuels fall.”
Patterson suggested SAF can help mitigate this decline by shifting demand from the road to the sky. Since electrifying aviation is not currently feasible, especially for long-distance travel, airlines are turning to SAF to reduce carbon emissions.
“There are multiple solutions to reducing emissions from aviation, like energy efficiencies and possibly hydrogen, but the beauty of SAF is, by and large, it’s a like-for-like replacement for traditional jet fuel. It’s the same molecule. You don’t need to redesign the whole fueling infrastructure. You do need some blending right now, but in general, it’s an easy swap out,” he said.
SAF is currently not as profitable as renewable diesel, but Patterson said policies like the Illinois SAF Tax Credit, designed to incentivize the use of sustainable aviation fuel by air carriers in the state, “actually flips the narrative and makes SAF more valuable.”
Illinois ranks fourth in the nation in biodiesel production and Patterson said the demand for soybeans alone for biofuels has doubled in the last few years. As the No. 1 soybean producer and No. 2 corn producer in the U.S., increasing biofuel and SAF production present opportunities for Illinois agriculture to supply more feedstocks to meet this growing demand.
“Renewable diesel (demand) is sort of leveling off … growth over the last three years is slowing down and SAF is that next accelerator,” Patterson said, highlighting five times more SAF supply, and also demand, in 2024. “If that continues, then we will see that demand for soybean oil start to pick up as well.”