What Are Sustainable Aviation Fuels?, with Nafisa Lohawala

Notable Quotes

• Aviation industry poses a significant climate challenge: “Commercial aviation is estimated to contribute to around 4 percent of human-induced global warming. That might not seem large, but note that air-travel demand and emissions have been rising steadily. The sector’s carbon dioxide emissions have doubled since the mid-1980s, and projections suggest that the demand for air travel could triple the 2005 levels by 2050, which could also significantly contribute to climate impacts, unless effective measures are taken to reduce them.” (3:21)
• No major changes are needed for aircraft to use cleaner fuels: “[Sustainable aviation fuels] can help improve air quality, because they burn cleaner than conventional jet fuels. But most importantly, they can have a significant impact on greenhouse gas emissions, and they don’t really require any major changes to the existing aircraft. As a result, the industry has been seeing them as the most viable near-term solution for large-scale emissions reductions.” (5:35)
• High costs remain a barrier to widespread adoption: “We are definitely seeing a lot of interest, but the sad news is that the actual consumption of SAFs remains really low compared to overall jet-fuel demand. In the United States, for example, it accounted for less than 0.2 percent of the total jet fuel consumed by airlines in 2023. We think that high costs are a really major barrier to widespread adoption.” (25:38)

Top of the Stack

• “Alternative Fuels for Reducing the Contribution of Aviation to Climate Change” by Nafisa Lohawala, Michael A. Toman, and Emily Joiner
• “Promoting Sustainable Aviation Fuels: Considerations for Policymakers” by Nafisa Lohawala
• “Supporting Policies for Sustainable Aviation Fuels: Key Areas for Further Research” by Nafisa Lohawla and Michael A. Toman
• Mistakes Were Made (but Not by Me) by Carol Tavris and Elliot Aronson
• How to Know a Person by David Brooks

The Full Transcript

Daniel Raimi: Hello, and welcome to Resources Radio, a weekly podcast from Resources for the Future. I'm your host, Daniel Raimi. Today, we talk with Dr. Nafisa Lohawala, a fellow here at Resources for the Future (RFF).

Along with a couple of colleagues, Nafisa recently published a working paper that examines sustainable aviation fuels, a key component of reducing emissions from global air travel. In today's episode, Nafisa will help us understand these fuels. What are they made from, how are they made, and how much emissions reductions can they provide? We'll also talk about the policies that can help bring sustainable aviation fuels into the market, as well as how they are being deployed and scaled up today. Stay with us.

Nafisa Lohawala, our colleague here at Resources for the Future, welcome back to Resources Radio.

Nafisa Lohawala: It's great to be back. Thank you for having me.

Daniel Raimi: Of course. Nafisa, I'm really excited about today's conversation. Because you've been on the show before, I'm not going to ask you to tell us about your background. Because we're going to be talking about sustainable aviation fuels, I would like to ask you about the last time you went on an airplane. When was the last time you went on a trip, and what did you do?

Nafisa Lohawala: The last time I took a trip was just a couple months ago. I was visiting my family in India. I actually just slept through the entire flight.

Daniel Raimi: That's impressive, because I imagine it's more than one flight, right? Or is it just one flight?

Nafisa Lohawala: Well, we have a direct flight from DC to Delhi, so that's nice.

Daniel Raimi: Okay. You grew up in Delhi?

Nafisa Lohawala: I take a domestic flight in India, but I visit some friends in Delhi, so it's not that bad.

Daniel Raimi: Cool. I'm glad you were able to sleep. I wish I was able to sleep on airplanes. That would make them much more pleasant.

Anyway, as I mentioned in our introduction, we're going to talk about all things sustainable aviation fuels (SAFs) today. Because that's a long phrase, I think we're just going to say “SAFs.” Instead of “sustainable aviation fuels,” you'll hear both Nafisa and me referring to SAFs quite often.

I'd like to start the conversation with a couple of quick background questions. First, can you give us a sense of how significant global greenhouse gas emissions are from the aviation sector? And then, even though this isn't really the focus of our conversation, I know that aviation affects the climate in ways other than just emitting carbon dioxide and greenhouse gas from the combustion of fuels. Can you just give us a super quick description of those kinds of interesting other ways that aviation affects the global climate?

Nafisa Lohawala: Aviation actually accounts for about 2.5 percent of human-induced carbon dioxide emissions. As you mentioned, this is only part of the picture. The sector's overall climate impact is much higher when you consider non-carbon effects. For example, there are contrails, which are white streaks that planes leave behind. They're formed when water vapor from engine exhaust freezes in the cold upper atmosphere. These contrails also tend to trap heat and contribute to global warming.

Now, if you consider all these factors combined, commercial aviation is estimated to contribute to around 4 percent of human-induced global warming. That might not seem large, but note that air-travel demand and emissions have been rising steadily. The sector’s carbon dioxide emissions have doubled since the mid-1980s, and projections suggest that the demand for air travel could triple the 2005 levels by 2050, which could also significantly contribute to climate impacts, unless effective measures are taken to reduce them.

Daniel Raimi: Yeah. It's super interesting about the contrails. It's something that I didn't realize until fairly recently.

One other quick question on this: is using sustainable aviation fuels, would that have any effect on the contrail impact of aviation, or are we just talking about carbon dioxide emissions?

Nafisa Lohawala: Early studies have shown that some types of SAFs can actually help reduce the contrail impact, as well.

Daniel Raimi: That is super interesting. Okay, the next background question that I'd love for you to help us understand is the suite of tools that we might be able to use to reduce emissions from the aviation sector. Obviously, today we're talking about SAFs, but there's some other options. So, I'm hoping you can give us a little lay of the landscape, and then give us a sense of the role that SAFs are likely to play—or that we think they might play—as a portfolio of strategies to reduce emissions from aviation.

Nafisa Lohawala: Yeah. There are several ways that have been discussed to reduce aviation's greenhouse gas impact. There are in-sector actions that can include improving aircraft and engine technologies, or just optimizing operations like fuel-efficient flying, reducing air demand by maybe encouraging virtual meetings, and then, obviously, as you mentioned, switching to these low-carbon energy sources, such as sustainable aviation fuels.

Now, among these different options, sustainable aviation fuels, or SAFs, as you mentioned, are really expected to play a key role in decarbonizing aviation. I mentioned that some types of SAFs have been even shown to reduce contrail formation. They can help improve air quality, because they burn cleaner than conventional jet fuels. But most importantly, they can have a significant impact on greenhouse gas emissions, and they don’t really require any major changes to the existing aircraft. As a result, the industry has been seeing them as the most viable near-term solution for large-scale emissions reductions. Now, this is just about the in-sector measures. Obviously, you could complement them using out-of-sector measures, as well, such as carbon dioxide removal and greenhouse gas reductions in other sectors, which can help offset emissions within the aviation sector.

Daniel Raimi: That's great. That totally makes sense. One last question—again, a background question before we really dive into the substance here—which is asking you to define this term: “sustainable.” I'm sure many of us have looked at packaging on food products or other branding things that say they are sustainable, and we often wonder, “Okay, what does that actually mean?”

When you use the term “SAFs” or “sustainable aviation fuels,” how do you define it, and how should we think about it?

Nafisa Lohawala: I want to mention this definition by the International Civil Aviation Organization (ICAO), which is a specialized United Nations agency. They define a sustainable aviation fuel as a renewable or waste-derived aviation fuel that meets a certain sustainability criteria, and that specifically includes a minimum 10 percent reduction in life-cycle greenhouse gas emissions relative to the conventional fossil-based jet fuels.

Now, this concept of life-cycle emissions is actually quite interesting. These fuels release carbon dioxide when they are burned, but they are produced using processes that aim to offset these emissions. So, the carbon intensity is lower on a life-cycle basis. The goal really is to ensure that the production and burning of these fuels significantly reduces net greenhouse gas emissions when compared to the conventional jet fuels. For example, if the fuel is derived from crops, then carbon emitted during the combustion is partly neutralized by the carbon absorbed by the crops when they're growing.

Daniel Raimi: Nafisa, one thing that's interesting is that 10 percent threshold. I guess I'm a little surprised that it's only a 10 percent reduction in life-cycle emissions that are required. When you think about sustainability and greenhouse gas emissions, net zero is the gold standard that we often look toward. Can you say anything about where that 10 percent threshold came from?

Nafisa Lohawala: This 10 percent threshold is what they use to define the sustainability criteria to implement this policy called Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). In practice, a lot of different pathways and feedstocks can lead to much higher emissions reductions, up to 94 percent, as per ICAO's calculations.

Daniel Raimi: Okay. As we're talking about these fuels, it'll be interesting to see and keep in mind which reduce emissions by a lot, and which reduce emissions by maybe only 10 percent or 20 percent.

Now, really turning to the substance of our conversation, can you give us an overview of some of the key sustainable aviation fuel pathways? What are the feedstocks that are likely to go into them, how much do they reduce emissions compared to jet fuels, and what are some of the challenges that might be associated with these different types of fuels?

Nafisa Lohawala: Yeah. “Sustainable aviation fuels” is actually an umbrella term. It refers to fuels that can be produced using multiple pathways and feedstocks. Some pathways can accommodate multiple feedstocks, and some feedstocks can be processed through multiple pathways. Now, the specific combination of a feedstock and pathway determines the fuel's chemical makeup and its life-cycle emissions.

The most established pathway is called hydroprocessed esters and fatty acids, or HEFA. It actually converts fats, oils, and greases into jet fuels. Now, this process is quite cost-effective compared to some of the other pathways, but the key limitation here is the competition for feedstocks. Resources such as used cooking oil and waste animal fats that go into this process are also in high demand for producing renewable diesel, which is another biofuel used in on-road transportation. The future scalability of this process is also a little unclear, because these waste feedstocks will be inherently limited by the scale of industries that produce them.

The next pathway that has been widely discussed is Fischer-Tropsch. This relies on long-established chemical processes to convert biomass, such as municipal solid-based or agricultural residues, into synthetic crude, which are then refined into jet fuels. This technology has been around for decades, but the problem is that it is a capital- and energy-intensive method. It also generates carbon dioxide as a byproduct, which would need to be captured if you really want to ensure low-carbon outcomes.

Then, there is an alcohol-to-jet pathway. It converts alcohol, such as ethanol and isobutanol, into hydrocarbons, and then those are refined into jet fuels. These alcohols can come either from starchy feedstocks, like corn, or cellulosic feedstocks, such as agricultural residues or non-food plants. Now, there are trade-offs here. The corn-based ethanol is cheaper, but has a higher carbon footprint. Cellulosic alcohols have a lower carbon intensity, but tend to be more expensive to produce, because it just requires more complex processes.

Finally, an emerging technology that is also being widely discussed is called power-to-liquid (PtL). This is an interesting pathway. It uses renewable electricity to produce hydrogen from water, and it combines that with carbon dioxide, which is captured either from the air or industrial sources, to create hydrocarbons. Now, depending on where the carbon dioxide and hydrogen comes from, PtL can produce really low-carbon SAFs. The issue, however, is that it also has significant infrastructure and operational costs.

As I mentioned, there are many different permutations and combinations here, and all of that determines what the eventual life-cycle emissions are going to be. According to ICAO's calculations, the emissions reductions can be as high as 94 percent, compared to conventional jet fuels. The overall problem, I think, is the scarcity of sustainable feedstocks and the lack of mature production processes, which really leads to high production expenses in all of these pathways, more for some pathways than others. As a result, SAFs can be quite expensive, up to two to three times more expensive than fossil-based jet fuels, or even higher.

Daniel Raimi: That's really interesting. Among those four technology pathways that you gave us, the HEFA, Fischer-Tropsch, alcohol-to-jet (or AtJ), and power-to-liquid (or PtL), is there a significant difference between them in terms of greenhouse gas emissions reductions? Do some of them look better than others on an emissions pathway, or does it depend a lot on the specifics of each process?

Nafisa Lohawala: Yeah, I think it really depends on what feedstocks go into it—where the energy is sourced from. As I mentioned, depending on where the carbon and hydrogen comes from, PtL can be really low carbon.

Daniel Raimi: That's great. One other question that often comes up when we talk about corn ethanol in the United States, or other types of ethanol that's grown on dedicated farmland, is that the issue of land use competition comes up. Is that a big issue for the alcohol-to-jet category specifically, or is it also something that might come up in these other technology pathways?

Nafisa Lohawala: Yeah. Agricultural feedstocks can be used in multiple pathways, not just AtJ. They can also be used as HEFA feedstocks.This is, in general, an issue with all kinds of agricultural feedstocks. There's always this issue of, "Well, what if it causes indirect land use change and maybe deforestation, which, in turn, can increase emissions?" I think this is definitely a very widely theorized area. There is a lack of research on it, but definitely a very important area to be working on.

Daniel Raimi: Yeah, interesting. Let's turn, now that we have a simple understanding of the technologies at play and some of the fuels that might be used, to the policies that might induce companies to switch to those fuels. Can you give us an overview of what are the, again, high-level types of policies that we might see, or that maybe we are seeing out in the real world, that can actually bring some of these fuels into the market?

Nafisa Lohawala: Yeah. There are many different policy approaches that have been adopted worldwide to support SAFs. First of all, there are these market-based policies. I already mentioned the CORSIA, or the Carbon Offsetting and Reduction Scheme for International Aviation. This is a key example.

This policy was created by ICAO in 2016. It's the first global, market-based measure that requires airlines to limit carbon dioxide emissions. The way it works is that airlines must calculate the excess carbon dioxide emissions above a certain baseline and acquire emissions credits from other sectors to offset them. They can use SAFs to reduce the amount of excess emissions that they would need to offset. So, in some sense, it's incentivizing the use of SAFs.

Then, there is this European Union Emissions Trading System (EU ETS), which is another example of a market-based policy. The way it works is that it sets a cap on the total aviation emissions within Europe, and it allows airlines to trade emissions allowances among each other. Now, this cap decreases over time, which then incentivizes airlines to adopt low-emission options, like sustainable aviation fuels.

Some places, like the United States, have also explored financial incentives to narrow the cost gap between SAFs and conventional jet fuels. In the United States, for example, the Inflation Reduction Act provides tax credits to SAF producers, helping them reduce the price difference between these two fuels, and hopefully, making them more accessible for airlines.

Finally, there are mandates where governments set minimum blending targets for SAFs. This policy has been explored in many different places, including the European Union, the United Kingdom, and Japan. The UK SAFs, for example, require 2 percent blending by 2025, and that goes up to 22 percent by 2040. Similarly, the EU mandate starts at 2 percent in 2025, and actually is quite ambitious. It rises up to 70 percent in 2050.

Daniel Raimi: That's really interesting. As you were mentioning for the Inflation Reduction Act, I was curious about that specific policy here in the United States. Tell me if I got this right: Just through a quick internet search, it looks like the tax credit is about $1.25 for each gallon of SAF. To qualify for the credit, the SAF has to have a reduction of at least 50 percent in life-cycle greenhouse gas emissions compared with traditional jet fuels. Does that sound about right?

Nafisa Lohawala: Yeah. It can go up to $1.75, but, more or less, that's right.

Daniel Raimi: Oh, right. So, for each additional reduction in life-cycle emissions, you get some extra credit?

Nafisa Lohawala: That's correct.

Daniel Raimi: That's very interesting. Across these different types of policies, do you and your coauthors have favorites? Do you have ones that you think are most promising, or that might be working best out there in the real world?

Nafisa Lohawala: We have this recent working paper where we compare all these different policy approaches across different important dimensions that we think policymakers should consider. For example, the cost-effectiveness, incentives for long-term capacity investments, technological neutrality, affordability, and political feasibility. We also highlight in that paper some ways to strengthen these existing policies to send stronger signals for SAF production and use.

Conceptually, we think that the EU Emissions Trading System performs really well in a lot of different areas. It sends a long-term signal to the market, and it provides flexibility in how emissions reductions are achieved, which can really encourage technological innovation in SAFs. At the same time, competition among SAF suppliers can increase efficiency and cost reductions.

The challenge is that the cost of allowances and emissions reductions can be really plain to see for the airline operators, as well as by consumers through higher ticket prices. And that raises concerns about political feasibility, at least for ambitiously low emissions gaps.

There are also concerns about the system's limited geographical scope, which can then lead to carbon leakage as emissions shift to regions outside its jurisdiction. And then, of course, the overall effectiveness will really depend on the implementation details, as well, such as the size of the emissions gap that is put in place.

Then there is the Carbon Offsetting and Reduction Scheme for International Aviation on the other hand, which has the advantage of global coverage, but its effectiveness in reducing emissions will really hinge on the supply of high-quality offsetting projects. Moreover, as of now, this offsetting requirement that they have set for individual airlines is based on the sectoral growth and emissions, rather than airlines’ own emissions growth. We think that strengthening the focus on individual airlines’ own emissions reductions can provide much stronger incentives for them to adopt SAFs.

Talking about these other policies (mandates for SAF production for example), now we think they can be quite effective in the short term at driving demand, but they are likely to be less cost-effective than these market-based measures like emissions trading systems. The problem is that these mandates can create incentives for very specific fuels that are required by the policy, which can then limit innovation. If these mandates are uniform, then they would also overlook differences in the cost of emissions reductions across different SAF producers.

Now, there are potential solutions. For example, you could require higher blending of fuels that have lower carbon intensity, and that can potentially incentivize broader innovation. And then, such programs can maybe also incorporate a credit-trading market that can account for cost differences across different producers.

Finally, thinking about these output-based tax breaks, like those in the Inflation Reduction Act: Now, they can provide short-term financial support, but they're also likely to be less cost-effective than the market-based incentives, because they offer equal incentive to all producers, irrespective of how much it costs them to produce a given type of SAF. It's also really unclear if these incentives can send a strong long-term signal that is needed to attract private investment. And yet, these tax credits can also be really difficult to phase out once the market matures and incentives are no longer needed to sustain the market.

Daniel Raimi: Yeah, once people have tax credits, it's hard to take them away. I also wonder, with the tax-credit policy, how replicable it is for less-wealthy countries. The United States has a huge balance sheet that it can bring to bear, whereas in many other parts of the world, that type of fiscal policy is not really going to be on the table.

Nafisa Lohawala: Exactly. There's this one promising idea that we have identified in our paper. It's a national carbon intensity standard for aviation fuels with tradable credits. This builds on the California Low Carbon Fuel Standard policy, which mainly targets motor fuels. In the paper, we argue that this policy can really help address some of the challenges in the current ones. I am not going to talk about a lot of details here, because we have limited time, but I do encourage listeners to read that paper for more insights on what effective policies for SAFs might look like.

Daniel Raimi: Great. Excellent. Of course, we will have a link to the paper in the show notes, so people can check it out, and also to the blog posts that you and your coauthors have put together on it, as well.

One quick follow-up question. This is a little bit of a tangent, but I was thinking about it as you were talking about the EU ETS, and ETS standing for Emissions Trading System, of course. When flights travel from one country to another, and especially when they travel across oceans or across continents, how do those emissions get accounted for in national emissions inventories? Like, if a flight goes from the United States to London, do those emissions get credited or debited on the US emissions ledger? Does it go to the UK emissions ledger? Is it divided in some way? How does that work?

Nafisa Lohawala: No, actually. The sad truth is that they don't get accounted in national inventories at all. As per the Paris Agreement, countries specifically are not responsible for them. These are international emissions, and because they go into the international airspace, they get clubbed together as bunker fuels. This is one reason why the International Civil Aviation Society, or ICAO, has developed this global policy, CORSIA, that is supposed to take care of these international aviation emissions.

Daniel Raimi: Right. That's super interesting.

A couple questions now just about what's happening in the real world: I've read some articles recently about airlines using sustainable aviation fuels in maybe one engine of a four-engine trip across the Pacific. Are most jet engines capable of using these fuels at a high blend, or do you need special kinds of engines to run different kinds of sustainable aviation fuels?

Nafisa Lohawala: Currently, most jet engines cannot really use SAFs as a 100 percent replacement for jet engine fuels without modifications. The reason is that SAFs lack sufficient aromatics. These are chemicals that help maintain the integrity of seals in the existing aircraft engines. The traditional jet fuels naturally contain enough aromatics to prevent any malfunctions. So, there are blending limits in place for SAFs to ensure that they have the necessary aromatic content for safe operation.

But there are also alternative solutions that are being explored. For example, adding synthetic aromatics or developing new materials for aircraft fuel systems that can handle lower aromatic levels. As you mentioned, these recent test flights that are using 100 percent SAFs have actually shown that full replacement is possible with the right kind of modifications.

Daniel Raimi: Interesting. And aromatics—just for listeners who might be thinking of Angostura or Peychaud's aromatic bitters, which is what I think of when I think about aromatics because it's an ingredient that I use in cocktails a lot—the aromatics you're referring to, those are a specific type of hydrocarbon, right? It's like a chemical?

Nafisa Lohawala: That is correct.

Daniel Raimi: Okay, great. I was imagining somebody out there dumping a bunch of bitters into the jet engine, and, obviously, that's not what's going on.

One last question before we go to our Top of the Stack segment. Nafisa, there's been lots of interest in adopting these fuels, a lot of talk about it. I'm curious to hear how much progress airlines have actually made in adopting it. Are we seeing any widespread use, or are we just seeing it at the pilot phase today?

Nafisa Lohawala: We are definitely seeing a lot of interest, but the sad news is that the actual consumption of SAFs remains really low compared to overall jet-fuel demand. In the United States, for example, it accounted for less than 0.2 percent of the total jet fuels consumed by airlines in 2023. We think that high costs are a really major barrier to widespread adoption.

That being said, several major airlines, like United, American, and Delta, have made long-term purchase commitments as a part of their broader sustainability goals. There's also these government initiatives, like the interagency SAF Grand Challenge in the United States, which is aiming to scale up production as well as reduce costs significantly. Right now, they're targeting a production of 3 billion gallons of sustainable aviation fuels annually by 2030, and I really hope that their hard work yields some positive results.

Daniel Raimi: Yeah. To give us a sense of how much 3 billion gallons is, can you help us understand, maybe, what percentage of aviation fuels that might represent, or how much aviation fuels we consume today, or anything that can help us put that number in context?

Nafisa Lohawala: In 2023, US airlines consumed around 25 billions of total jet fuels. This is around 12 percent of that total demand.

Daniel Raimi: Okay. That's really interesting. Pretty substantial.

Nafisa, I've learned a ton in today's conversation. I've been wanting to learn more about SAFs, and this is definitely getting me off to a good start. I hope listeners will check out the working paper and accompanying blog posts, as well, to get a sense of how to go deeper on these topics.

Nafisa, I'd love to close out the conversation by asking you the same question we ask all of our guests, which is to recommend something that's at the top of your literal or your metaphorical reading stack.

Nafisa Lohawala: Yeah. I recently read this book called Mistakes Were Made (But Not by Me) by Carol Tavris and Elliot Aronson, and I absolutely recommend it. This book broadly explores the concept of cognitive dissonance. It's basically the psychological stress that we all experience when our actions are not in line with our beliefs and our ideals. Obviously, we all naturally want to see ourselves as competent and well-intentioned, so we tend to convince ourselves that we did the right thing, even though the evidence might suggest something completely different. So, this mindless self-justification can really have far-reaching consequences. The authors do a great job at illustrating this through several compelling examples, from the criminal justice system, politics, medicine, and even personal relationships. I think what I found most impactful about this book is that it forces you to self-reflect. It's not really a self-help book, but even then, it opens a lot of room for personal growth. I found this book fascinating and highly, highly recommend it.

Daniel Raimi: That's so interesting. It's funny, because as you were describing that book, it reminded me of a book that many of us at RFF are actually reading. We have an RFF book club, and we're reading this recent book by David Brooks called, How to Know a Person. One of the sections in that book describes how we perceive reality, and how warped we often are in the way that we perceive reality relative to other people. The recommendation you just made sounds like it's very relevant to that point, as well.

Nafisa, this has been a fascinating conversation. Thank you so much for your work and for coming onto the show to tell us about it. We really appreciate it.

Nafisa Lohawala: Thank you.

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