"Several countries, including the United Kingdom, are preparing various support policies and incentives to promote the supply of sustainable aviation fuel (SAF)."
Alex Kaufman, analysis and consulting manager at global energy market research firm Argus, said in a video interview with ChosunBiz on the 23rd that "countries are actively responding to expanding SAF demand," and "the Korean government should also prepare response measures accordingly."
SAF is an eco-friendly aviation fuel made from recyclable feedstocks such as corn, sugarcane, used cooking oil, and animal fats. It is expected to cut carbon emissions by up to 80% compared with conventional petroleum-based jet fuel.
SAF is known to be 2 to 9 times more expensive than conventional jet fuel because production expense is high and feedstocks are scarce. However, in the carbon-neutral era, the aviation institutional sector, which emits large amounts of carbon in the transport institutional sector, finds it difficult to use electricity or hydrogen, so SAF is emerging as an alternative.
In fact, the European Union (EU) has mandated SAF blending starting this year. The blending target starts at 2%, rises to 6% in 2030, and increases in stages to 70% by 2050. Airlines and fuel suppliers that fail to comply will be fined.
The United Kingdom is also implementing a mandatory SAF blending scheme starting this year. It plans to raise the ratio to 10% in 2030 and 22% in 2040. Japan has also set a target of 10% by 2030.
The Korean government also released a road map to mandate SAF blending in Sep. It is reviewing a plan to start at 1% from 2027, expand to 3 to 5% in 2030, and 7 to 10% in 2035. However, the domestic SAF production base and specific support policies remain insufficient.
According to Argus, SAF is currently produced in various ways. The main methods include: ▲ the "hydroprocessed esters and fatty acids (HEFA)" method, which refines used cooking oil and fats and oils ▲ the "Fischer-Tropsch (FT)" gas conversion method, which converts agricultural byproducts or municipal waste into gas and then refines it ▲ the "alcohol-to-jet (AtJ)" method, which refines bioethanol and other alcohols ▲ the "power-to-liquids (PtL)" synthetic fuel method, which synthesizes carbon dioxide and hydrogen.
Among these, the hydroprocessing method using used cooking oil is the most common, but because used cooking oil feedstocks are in short supply, a variety of feedstocks and technologies will likely be needed going forward.
Kaufman said, "Through 2030, SAF based on used cooking oil will dominate, but after that, fuels will be in short supply, so developing fuels using other feedstocks will become important." He added, "The United Kingdom is capping the share of HEFA-based SAF so as not to rely on any single technology and is supporting other technologies as well."
The "revenue guarantee scheme" being pursued by the U.K. government is one of the representative SAF policies. If SAF prices fall excessively, the government compensates for part of the losses, and if prices rise, it recoups excess profits.
Kaufman said, "The United States, instead of forcing mandatory SAF blending, is providing incentives to SAF suppliers and users." The U.S. federal government is currently implementing the renewable fuel standard (RFS), which requires refiners to blend a certain proportion of biofuels, and the Inflation Reduction Act (IRA), which provides tax credits.
By state, Illinois offers a tax credit to airlines that use SAF, Nebraska to companies that produce SAF, and Minnesota to both SAF producers and blenders. California and Oregon grant "low-carbon credits" to fuels with lower carbon emissions and allow them to be traded.
Kaufman assessed that concerns that SAF support measures could be rolled back due to a policy shift by President Donald Trump are unlikely.
He analyzed, "The decarbonization-focused tax credit system introduced under the Joe Biden administration remains in place and is likely to continue," adding, "This helps farmers, who are Trump's support base, and also helps promote domestic production." He added, "Such policies will affect not only aviation but other industries across the board."