US announces $244m grant for SAF projects

opinion

by Fayaz Hussain

August 27, 2024

Last week marked the two-year anniversary of the Inflation Reduction Act – a monumental legislation to deal with the effects of climate change. It was a big step forward for the decarbonisation of the aviation sector too because the act prioritised sustainable aviation fuel (SAF) as the key lever in helping the sector reduce its emissions.

As part of the Act, the Biden administration announced an ambitious challenge to produce 3bn gallons of SAF by 2030 and scaling domestic production to 35bn gallons by 2050. To meet these targets, the administration last week announced $244.5m in Fueling Aviation’s Sustainable Transition discretionary grants for 25 projects spanning 15 states.

“The projects are instrumental in advancing our environmental and economic sustainability goals by facilitating the development and implementation of sustainable aviation fuels,” said Laurence Wildgoose, FAA assistant administrator for Policy, International Affairs and Environment.

Refiners, blenders and infrastructure developers such as World Energy, BP, Marathon Petroleum, World Energy, LanzaJet, Phillips 66 and Gevo were all awarded funds for respective projects.

“I’m proud to share that LanzaJet is a recipient of grant funding to help us expand our production capacity of SAF at our plant in Soperton, GA,” said Jimmy Samartzis, CEO, LanzaJet.

LanzaJet was awarded $3.1m. The company said the funds will be used “install key infrastructure that will increase our SAF production capacity by over 518,000 gallons annually. Such support is crucial as we work to scale SAF production and contribute to the SAF Grand Challenge goals.”

Moreover, Arcadia eFuels also received a $14.6m award for the front-end engineering design of its Texas-based Project Arc which is set to begin producing 23.2m gallons of SAF by 2028.

The company said: “this award will help accelerate our development efforts to build and produce eSAF to contribute to a greener future for aviation.”

Phillips 66 received grants for four projects: one in Oregon and three in California.

The company was awarded $3.9m to change the catalyst in the Aromatic Saturation Unit at the Rodeo Renewable Energy Complex in California site, which is scheduled to begin producing SAF in the last quarter of 2024.

Meanwhile, three other grants of $11.3m, $6.3m and $1.4m were to set up blending and storage infrastructure at Portland (Oregon), Torrance (California) and Sacramento (California), respectively.

Martinez Renewables Facility, operated by Marathon Petroleum, was by far the largest recipient of the award, getting $50m to upgrade its existing site to produce

SAF. The funding will expand the facility to produce 100-350m gallons of SAF per annum by 2027.

The funding comes just weeks before the US elections as the Inflation Reduction Act faces ongoing policy uncertainty with the Republican agenda has hinting at sweeping changes. But whether it will affect SAF or not, only time will tell.