Supply Chain Development

CAAFI’s Role

CAAFI® seeks to facilitate development of successful Sustainable Aviation Fuel (SAF) supply chains through direct supply chain deployment projects, participation in research on supply chain integration and enhancement opportunities, communications to advance understanding of supply chain needs, and enhancement of current supply chain approaches and best practices. CAAFI works with partners to conceptualize and develop efficient, sustainable supply chain structures. CAAFI fosters approaches to risk-sharing across the supply chain that can reduce risk for farmers/feedstock producers, increase rural development opportunities, and generate equitable economic benefits among each supply chain segment.

Elements of the SAF Supply Chain

The alternative jet fuel supply chain is the sequence of all processes and elements involved in the production and distribution of alternative jet fuel. To be successful, supply chains need to be optimized, including reducing costs, technology uncertainty and risks, and increasing yields of both feedstocks and fuel production processes, as well as improving the collection, storage, densification, and pretreatment of biomass and municipal solid waste, and optimizing its transport to conversion facilities. Such needs were reflected in the Federal Alternative Jet Fuels Research and Development Strategy (FAJFRDS), a multi-year coordination effort among federal agencies that is being implemented in multiple agency plans, research initiatives, and analyses.

CAAFI is engaged across all steps of the supply chain, from the field to the wing, and facilitates supply chain development.

Supply Chain Elements and CAAFI’s Role

  • Feedstock Production
    Feedstock is harvested, collected, and stored until transported to feedstock processor at pretreatment and/or densification facilities.
  • Feedstock Pre-processing and Material Acquisition
    In some cases, feedstocks must be pretreated before transport to the biorefinery. For example, oilseeds may be crushed to extract vegetable oil, lignocellulosics may be densified (e.g., shredded or pelletized) for transport, municipal solid waste may be separated into lignocellulosic, recyclable, and non-usable fractions. In addition, biorefineries must acquire any additional materials other than feedstocks that are needed for conversion (e.g., hydrogen, catalysts, etc.).
  • Fuel and Co-product Production
    Feedstock is converted into an alternative jet fuel blending component that fulfills the requirements of a relevant jet fuel specification (e.g., ASTM D7566).
  • Fuel Blending, Certification, Aggregation, and Distribution
    The AJF must be blended within the maximum allowable levels and be certified as ASTM D7566 compliant, following which the fuel can be made available for use as jet fuel.
  • Handling, Processing, and Transport Logistics
    Throughout the supply chain, there are logistics to be addressed for handling, processing, and moving materials from one stage to the next. Feedstocks are largely transported by truck, or in some instances, rail. Alternative jet fuel is currently transported from the refinery to the end-user via fuel trucks due to insufficient quantities to enter pipelines and other challenges (see CAAFI’s white paper, Refinery to Wing: Transportation Challenges Associated with Alternative Jet Fuel Distribution). At the blending terminal/distributor, the blending component is mixed with traditional petroleum-based jet fuel, not to exceed the ASTM specified blend level.
  • Fuel End Use
    Airlines and the military are the primary end users of aviation fuels. For airlines, alternative jet fuel end-use distribution happens at the airport.

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CAAFI State and Regional SAF Supply Chain Efforts

CAAFI, through our State Initiative efforts, has a long-standing program working with local, state, regional, and Federal-level organizations to facilitate SAF supply chain development. Our efforts have focused on helping highly motivated local entities (e.g., non-governmental organizations, development agencies, and private industry) to identify potential partners for supply chain development and execute feasibility studies and analyses to lay the groundwork for a SAFJ supply chain in their area of interest. CAAFI’s experience with these projects has led to an understanding of best practices and “success templates” that can be applied to develop local and regional supply chain partnerships. In addition, CAAFI works with USDA Coordinated Agriculture Project grant recipients on integrated supply chain development projects.

To expand on these efforts, CAAFI is partnering with the FAA’s Aviation Sustainability Center (ASCENT), (also known as the Center of Excellence for Alternative Jet Fuels & Environment) to help define local, state and regional deployment projects that would benefit from the ASCENT researchers’ expertise in building out new SAF supply chains. The Project 1 team from ASCENT is evaluating regional supply chains that could be used for alternative jet fuel production. The project aims to use these analyses to identify key barriers throughout the alternative jet fuel supply chain that must be overcome to enable delivery of significant quantities of alternative jet fuel to enter the commercial market in the near term.

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Supply Chain Risk Management

CAAFI believes that for the industry to achieve near-term deployment and expansion, risk must be shared more broadly across the supply chain so that no one group carries the full risk burden of SAF production. In addition, all supply chain partners must see opportunities for profit reward. In addition to facilitating on-the-ground SAF supply chain development efforts, CAAFI has begun working in an advisory capacity with ASCENT researchers to develop tools to help the SAF industry manage shared risk and profit opportunities. CAAFI does not necessarily expect these models to be used in perpetuity, but is advocating their use in initial supply chains in order to expedite the development of success-examples and learning, and enable future replication or extrapolation.

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Reducing Production Costs

A critical need for growing the SAF market is reducing overall SAF production costs in order to develop pathways that can achieve cost parity with fossil-derived jet fuel. Steps can be taken across the supply chain to reduce production costs. The greatest challenge associated with the HEFA (hydroprocessed esters and fatty acids) SAF pathway is the higher cost of the final fuel compared to petroleum-based jet fuel, which is heavily affected by feedstock production costs (e.g., seed-derived vegetable oils). These costs can be lowered by developing feedstocks that produce more oils with less land and inputs, and generate higher crop yields. Downstream, enhanced HEFA conversion processes, or other conversion processes under development, can take advantage of lower quality oils, thus allowing use of a greater variety of oils. Investments in these areas can yield substantial returns. CAAFI’s R&D team has evaluated the challenge of HEFA Cost Reduction in detail, and are working to assist with the qualification of other lipid conversion processes.

SAF production pathways in development, such as Hydrotreated Depolymerized Cellulosic Jet (HDCJ) produced through pyrolysis, and ATJ-SPK expansion (catalytic oligomerization of ethanol), among others, offer additional potential opportunities for cost-competitive renewable aviation fuels produced from a broader range of lignocellulosic feedstocks. Potential woody and agricultural lignocellulosic biomass sources are promising because of the significant potential volume available, but they must be developed into cost-effective, efficient pathway feedstocks available at scale in order to be utilized by the SAF. New conversion technologies under development may also enable the use of other emerging feedstocks (algal biomass, waste sludge, municipal solid waste, industrial gases). Research among CAAFI partners aims to advance these technologies and lower costs for associated new SAF production pathways.

Policy incentives such as EPA’s National Renewable Fuel Standard (RFS) program, and state-based Low Carbon Fuel Standard (LCFS) programs such as the California LCFS can drive increased production of SAF and establishment of new fuel production pathways. SAF is not required under the RFS program, but can earn credit for refiners producing jet fuel and has helped incentivize the development and qualification of advanced renewable jet fuel pathways. The California LCFS currently only covers on-road transportation and does not include jet fuel. However, California is now evaluating the potential inclusion of SAF in the California LCFS. This may have a substantial impact on the market value of SAF, helping generate increased supply chain production and fuel availability. LCFS programs strongly incentivize fuels with the lowest carbon intensity (rather than just large volumes of fuels meeting minimal carbon content reduction thresholds). Thus the California LCFS and additional incentive programs initiated by other states have the potential to significantly drive real innovation in advanced SAF pathway development.

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Logistical Challenges and Opportunities

Logistics, particularly for SAF derived from biomass feedstocks, including harvesting, collecting, storing, and transporting, are key challenges to establishing SAF supply chains. In order for the SAF feedstock supply systems to be economically viable, they must be able to provide the desired quantities and utilize existing infrastructure, which requires qualities such as densification and ease-of-handling in bulk. Condensing the feedstock’s size for storing and transporting can reduce the overall production costs even when it requires additional capital costs. Idaho National Laboratory has developed the Uniform-Format Feedstock Supply System consisting of modularized harvesting and preprocessing systems that can handle a variety of feedstocks while maintain its compatibility with existing infrastructure and systems. Additional logistical challenges and opportunities remain downstream.

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