US lawmaker floats LCFS for aviation fuel

A US lawmaker is proposing the creation of a low-carbon fuel standard (LCFS) credit trading program to help cut greenhouse gas (GHG) emissions from the country's aviation sector.

US representative Julia Brownley (D-California) has proposed legislation to create the LCFS and authorize more than $1bn in federal support for sustainable aviation fuel (SAF) projects and related research. The Sustainable Aviation Fuel Act would also establish a national goal of reduction aviation sector GHGs by 35pc by 2035 and achieving net zero emissions by 2050.

"Aviation alone contributes 9pc to US greenhouse gas emissions from the transportation sector and is therefore a critical target toward achieving our climate goals. Sustainable aviation fuel will go a long way to reducing aviation sector greenhouse gas emissions but it needs a focused federal response to make it a reality," Brownley said.

Brownley is a member of the US House of Representatives' Transportation Committee, serving on the Aviation Subcommittee. She also is a member of the House Select Committee on the Climate Crisis.

Brownley's proposal comes at a time when Democrats are mulling over a series of national climate proposals in anticipation of president-elect Joe Biden taking office next year. Biden has called for achieve net-zero emissions across the economy by 2050 and has expressed support for proposals to expand the market for SAF.

Browley's bill would direct the US Environmental Protection Agency to establish the aviation sector LCFS, which would require a 20pc reduction in the carbon intensity of aviation fuel by 2030 and 50pc by 2050.

Browley's bill would also direct the US Department of Defense to transition 10pc of its aviation fuel procurements to SAF beginning in 2024, with the caveat that the secretary of defense could opt out if no available qualifying fuel could be sourced.

The bill also calls for creating an SAF blender's tax credit to range between $1.50/USG and $1.75USG, depending on the GHG reductions achieved by a fuel. SAF that reduces emissions by at least 50pc would be eligible, with fuels that achieve 100pc reduction eligible for the full amount.

SAF still comprises a small portion of the overall aviation fuel market, but demand is expected to increase in the future as the industry pursues environmental goals and programs like California's LCFS provide incentives. The state's program, which requires reductions in the carbon intensity of on-road fuels, allows SAF to generate compliance credits.

SAF has generated just over 20,200 metric tonnes of LCFS credits, with nearly 3.5mn USG consumed in the state, since it was added to the program in 2019. Over that period, the program has generated 21.7mn credits from all fuels.

SAF supporters are looking for greater policy support to help drive demand and production.

"The rate limiting factor for growth is the total monetary value that sustainable aviation producers receive compared to those for the on-road transportation market," San Francisco International Airport sustainability and environmental policy director Erin Cooke said last week during the Argus Biofuels Live virtual conference.

The airport is one of the major hubs for SAF, with deliveries enabled by Lufthansa, Alaska Airlines, Jet Blue, American Airlines, Amazon, Neste and World Energy and a goal to replace 5pc of all fuels at the airport with SAF by 2025.

Government support is especially needed given the aviation industry's thin margins and struggles during the Covid-19 pandemic, said Robert Boyd, who leads SAF deployment initiatives at the International Air Transport Association.

Boyd said that one issue that policymakers will need to address is how what portion of sustainable fuel feedstocks should be allocated to on-road transportation versus aviation.

Renewable diesel is often co-produced with SAF in the same refining process, which forces companies to choose between the fuels. To date, the economics have largely favored renewable diesel.

"As an extremely heavy industry that requires a high density liquid fuel, we do not have the same options around electric or even the discussion around hydrogen fuel is relatively premature," Boyd said. "We are going to need a liquid fuel for a long period of time, so I personally think there is a strong argument for policy to be directing that feedstock towards the aviation sector."

By Solomon Moore