HEFA leading the way for SAF, but feedstocks woes mounting: Sightline Climate
Hydrotreated Esters and Fatty Acids (HEFA) technology is leading the sustainable aviation fuel (SAF) production capacity benefitting from decades of refining experience, proven technology, and established waste-fat supply chains but feedstocks constraints are showing up, according to a Q1 Fuels Outlook published by Sightline Climate.
Used cooking oil remains the key component in HEFA-based SAF production across the EU. The UCO-based HEFA produced the majority of the EU’s SAF in 2024 but still covered only ~0.5% of jet fuel demand; meeting 2030 mandates would require far more UCO than Europe supplies.
“Europe is going to need to continue scaling up UCO imports, and a lot of that has historically come from China. The capacity freed up by the U.S. ban is likely to flow toward Europe – the UK and EU will probably just have to accept it,” said Oliver Boot, senior associate, Sightline Climate, who authored the report.
Sightline Climate is a research and market intelligence platform working with corporate strategy teams, venture capital investors, private equity, banks, and governments.
Nearly 75% of announced SAF capacity uses HEFA with coprocessing accounting of chunk the operational capacity compared to standalone plants. The real test for HEFA-based production capacity will be whether the market can support standalone plants including 6.2MT per annum capacity under construction and another 18.1MT per annum in announced projects.
The feedstock gap will only widen as China develops domestic SAF production base and other UCO-exporting countries begin producing SAF within the country as aviation decarbonisation picks up pace in Asia.
The report says improvements in UCO collection are unlikely to fill the gap. The continent would need “unrealistically high” UCO recovery rates.
Booth says alcohol-to-jet technology, especially in the US, is emerging as the most viable alternative for HEFA. But recent policy changes under the Trump administration including the reduction in SAF premium and the ban on imports of ethanol from Brazil from SAF have changed the dynamics.
“Where it gets more complicated is that from a fuel eligibility standpoint, the Trump administration also adjusted how the CI score is weighted. The assumptions within the GREET modelling and credit calculations now place less emphasis on CI score as a threshold for qualifying. In other words, you don’t need to be as clean to qualify for credit values under the Trump administration as you did under Biden,” Booth says.
Moreover, with HEFA struggles in the background, alcohol-to-jet is the leading non-HEFA technology, with 34 bio-AtJ projects totalling 4.8Mt/yr currently under construction and planning stages. “Its advantage is feedstock: global ethanol production (~110 billion litres/year) dwarfs the constrained supply of waste fats that every HEFA plant competes for,” Booth says.
Regional analysis
Comparing regionally, the US remains offers key stimuli to the SAF market with its incentives but demands sits in the European Union and UK owing to mandates. However, Booth says the current US SAF pipeline is driven primarily by the policy and are “unlikely to come online”.
“The wave of announcements was driven by the IRA’s $1.75/gallon SAF credit, but several of the largest projects have since stalled (World Energy’s Paramount Expansion, BP Cherry Point) and the credit has been reduced to $1/gallon,” he says.
“The projects that are advancing (Montana Renewables, Diamond Green Diesel, Phillips 66 Rodeo) tend to be existing refinery conversions with DOE backing or captive feedstock, limiting the scale of what’s working in this market.”
Meanwhile, Europe’s demand mandates give it nearly double US capacity altogether. The region hosts 32% of all SAF projects thanks to ReFuelEU’s binding demand making projects financeable. The Netherlands is the continent’s hub, with Neste’s operational Rotterdam plant (500k t/yr), a 700k t/yr Neste expansion underway, and Chane’s Koole Tankstorage Botlek (650k t/yr) under construction.
Technology, feedstock-to-gate cost stack critical for buyers
Sharing his takeaways from the analysis, Booth says secured feedstock contracts, proven conversion technology (not pilot-stage), and a realistic path to FID remain key points to look out for when entering offtake agreements.
“Projects with policy tailwinds (EU or UK mandate compliance or 45Z eligibility) carry less regulatory risk. If the developer can’t show you a credible feedstock-to-gate cost stack, the project isn’t ready an offtake commitment,” he says.
“Don’t plan around supply that doesn’t exist yet. 60% of the SAF pipeline is still in ‘announced’ status, and 40 projects are already cancelled or delayed,” he adds. “Offtakers building sustainability targets and procurement strategies around assumed future supply availability are taking on more execution risk than they may realise.”