Exploring the flight path of sustainable aviation fuel

Traditional jet fuel poses two challenges for the airline industry — it’s a major expense and it’s a big contributor of carbon emissions. The Environmental Protection Agency reports commercial airplanes and large business jets contribute 10% of U.S. transportation emissions.

Sustainable aviation fuel — commonly referred to as SAF — is a prime alternative to help decarbonize the aviation industry, enhance energy security, and create new economic opportunities. SAF is a blend of conventional jet fuel and synthetic components made from renewable feedstocks, such as used cooking oils, plant oils, and municipal waste.

This low-carbon fuel can be used without changes to the aircraft’s fuel-handling infrastructure, making it easy to implement. However, financing gaps, high construction costs for new facilities, and limited labor and feedstock can make SAF production challenging and expensive. Public and private capital support, cross-industry collaboration, and regional solutions aim to address these seemingly sky-high obstacles.

Banks can support clients from farm to flight

In October, Wells Fargo, Alaska Airlines, and the U.S. Department of Energy’s (DOE) Bioenergy Technologies Office hosted the Seattle Sustainable Aviation Fuel Pacific Northwest Workshop. The event brought together key players across the SAF value chain, including producers, investors, buyers, and government agencies. These participants discussed how increased investment can help advance SAF production while simultaneously supporting the agriculture sector to increase energy independence in the U.S.

Currently, the main commercial pathway to produce SAF in the U.S. is hydroprocessed esters and fatty acids, which is also used to produce renewable diesel. The competition for feedstock can lead to limited supply and refinery capacity. But, with minor modifications, existing renewable diesel production infrastructure can be converted for SAF production, bypassing the challenges of new construction projects.

Scientific researchers and investors are also exploring new ways to expand SAF production methods. The Prairie Research Institute discovered plastic waste can be transformed into SAF, while low-carbon, synthetic fuels — often called e-fuels — are widely seen as a solution to address feedstock challenges.

Financial incentives aim to scale production and distribution

The International Air Transport Association expects SAF to contribute approximately 65% of the emissions reduction needed for the aviation sector to reach net zero. However, high costs and limited supplies are barriers to deployment.

SAF has a green premium — a higher cost over alternatives with higher greenhouse gas emissions — costing two to ten times more than traditional jet fuel. Airlines often pass along the cost of fuel to air travelers through a fuel or carrier-imposed surcharge, but a National Geographic survey found more than a third of Americans would pay extra to offset their flights’ carbon emissions.

In 2024, the U.S. imported 24,000 barrels of jet fuel per day. Two bipartisan efforts could ease dependence on foreign fuels. The Synthetic Aviation Fuel Grand Challenge — a roadmap by the DOE, the U.S. Department of Transportation, and the U.S. Department of Agriculture (USDA) — aims to scale new technology and increase domestic energy production, while the recently introduced Farm to Fly Act of 2025 supports SAF development to promote energy security and independence through USDA bio-energy programs.

In certain regions, state-level incentives can complement federal efforts to address financial challenges and improve access. For instance, Illinois offers an additional SAF purchase credit of $1.50 per gallon purchased through 2032. This applies to SAF purchased for use in Illinois, which could encourage regional market growth.

Collaboration between airlines, SAF producers, and financial institutions can help to accelerate market growth. With continued investment, technological advancements, and federal and state-level support, the aviation industry can move closer to its goal of sustainable flight.